Thursday, June 18, 2015

Chip & Pin Coming Soon

by Ryan Anderes

Big changes lie ahead for consumers toward the end of 2015.  These changes will affect the way the Uptown handles its credit card transactions. In turn, it will also affect the way in which you handle your own credit card transactions.

We are all wary of change because we get so comfortable with how we do things.  Change isn't easy. In the case of "chip and pin" credit card transactions, I'm sure there will be some headaches at first - probably more so for the businesses like us - as we learn the pros and cons of the new software.

But overall, "chip and pin" will increase the security of our credit card information which is the ultimate goal! Your cards will, for the most part, look the same besides the "chip" on the front of the card. The cards with the magnetic strip on the back will be a thing of the past.

How you close a transaction will be different, and the card will never leave your possession! The servers will bring you a device that you will use at your table to pay your bill. No more going to the front desk register. You remain at your table; your server never touches your card; and you pay at your leisure.

You even add your own tip, which is another common area of credit card fraud. Now, when you leave the restaurant, you write your tip on your credit card slip.  But what you may not realize is that your credit card transaction is still open. It's the server who gets to go back into your transaction and adjust the amount. Dishonest servers (at places other than the Uptown, of course) could easily add a few bucks onto the tip. Unless you check your statement closely, most of us would never know.

There is a good chance that many of you have been affected by some type of fraudulent credit card transaction. Credit card fraud costs banks and credit card companies billions of dollars each year. Half of that fraud occurs in the United States, despite the fact that only 25% of all transactions occur within our country.

To further the conversation, most credit card fraud occurring in the United States comes from breaches within restaurants. The exact percentage I am not sure of, but it is very high from everything I understand. The breaches usually come from restaurants that are not 100% PCI DSS (The Payment Card Industry Data Security Standard) compliant. Thieves prey on these types of facilities... and once they get in, the amount of information they can gather is endless. PCI compliance is an entirely other conversation, but you can be assured that the Uptown is PCI compliant.

Besides the way you will process a credit card transaction in the future, another major change - the "liability shift" - will occur on the liability end of this process. Guidelines currently indicate that as of October 1st, 2015, any merchant that still accepts magnetic swipe cards (what you have in your wallet right now) would be liable for any breach in credit card data.

So, if we take magnetic swipe cards and get hacked, we are on the hook for all the fraudulent transactions that occur from our security breach. This is probably the biggest change on our end, and it will be why we are changing over to the "chip and pin" payment process. With that type of liability, one breach could mean the end of the Uptown! It's a major shift from the large corporations and banks to the small merchant!

Is this the first you've heard of the change in credit card processing, check out the following Chicago Tribune article to help you understand what's ahead.

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