restaurant emv terminalIn the aftermath of the EMV liability shift, the major trend in payment security has been the migration of fraud from card-present situations to the online world. EMV technology has been very effective at fighting card-present fraud, and as a result nearly every store that has adopted EMV has seen plummets in fraud. As overall EMV adoption increases, fraud decreases.

But there’s one industry that’s been left behind, and is still seeing major card-present fraud: the restaurant industry. The prevailing reason restaurants are still the target of fraud is simple - the restaurant industry has not adopted EMV as quickly as the rest of the retail world.

Why Restaurants Are The New Target
There were many reasons restaurants were slow to switch to EMV. First, there were costs associated with the changeover, from buying new hardware to training employees. This wasn’t unique to restaurants, of course, as it slowed down other major industries. But as those other industries have started to see the benefits of EMV and make the switch, restaurants have still lagged.

Why is that? One possible reason is that restaurants held on, for too long, to the idea that EMV fixed a problem that they did not have, and that counterfeit cards were primarily a problem for places like electronics stores, and that may have been true at the time of the EMV liability switch. But as those conventional targets spent the past two years switching to EMV, retailers who thought they’d never be targeted are now a large percentage of the remaining businesses accepting magstripe. And many of them are restaurants.chip card vs magnetic

Time to Make a Change
Friendly fraud is increasing quickly in the restaurant industry, and we’ve even heard of it increasing at fast food restaurants—places where you’d think ticket sizes might be small enough to be safe from friendly fraud. But now that restaurants see this trend, they're taking action, according to Jordan McKee of 451 Research.

“Restaurants are beginning to understand that a model of only accepting magstripe puts a bullseye on them and makes them a target for fraud,” McKee told us. “Criminals that are looking to use cards fraudulently are searching for businesses that still have magstripe terminals.”

For restaurants, it’s a problem that’s easy to solve—simply switch over to accepting EMV. Compared to normal retailers, the restaurant industry may face fewer of the dangers associated with e-commerce, so there’s little downside to the change. And not only that, the change allows them to implement other tech like pay at the table.

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