Is it Time to Skip the Chip? Weighing EMV against Employee Accounts
EMV – an acronym for Europay, MasterCard and Visa – is a technical standard for chip credit cards and the technology used to authenticate them. It was first developed in the early 1990s in order to make in-person credit or debit transactions more secure. By 2013, the European markets had widely adopted the standard. The transition in the US has been more recent: the Counterfeit Fraud Liability Shift took effect in October 2015, shifting responsibility for card fraud from card companies to merchants, unless merchants implemented EMV chip technology. A year later, how has EMV treated us? NEXTEP Solutions Consultant Bob Padget offers his view in what follows.
From the Desk of NEXTEP Solutions Consultant Bob Padget
Padget evaluates EMV performance and suggests an alternative standard for corporate cafes.
It’s been about a year since the EMV liability shift took effect, and I’ve seen some interesting results.
- Some readers are worse than others, but NONE of them are fast. In fast-paced environments like managed dining facilities, throughput has slowed significantly: the EMV process has been shown to add a 15-second lag.
- Tokenized payments offer improved security but have generally resulted in credit cards fees remaining high or even increasing due to the added cost of support.
As a result, many managed dining facilities are turning to cashless payment solutions in an effort to decrease credit/debit transactions. When properly implemented, a cashless payment solution – including inclining and declining balance accounts – can have a number of benefits for corporate cafes. But first, here’s a little bit of information about inclining/declining balances accounts themselves.
An inclining balance account, as the name implies, is an account whose balance increases as meals are charged to it. Typically used for payroll deductions, these accounts can also support subsidized programs that many companies offer to incentivize employees to dine in-house. At the end of the week or month, inclining balance accounts are reset to once again start at zero, either automatically or based on an import of payroll amounts deducted.
Declining balance accounts work in the opposite way. A credit is applied to the account and meal charges reduce the balance until it reaches zero, at which point additional funds need to be added to the account. Although this could be associated with a payroll pre-funding plan, declining balance accounts are usually funded by the employee with either a credit card or with cash at a cashier station.
Corporate cafes turn to employee accounts in the face of slow and expensive credit/debit transactions.
Pictured here, the corporate cafe at Microsoft HQ uses Self Order Kiosks, Self Check Out, POS, Mobile Ordering, and Dynamic Menu Displays™.
Employee account solutions have a number of advantages for managed dining services:
- Using an employee badge or RFID fob tied to an account makes it easier for employees to go cashless and can actually increase employee participation.
- Account transactions are much faster than EMV or cash transactions, making lines shorter and employees happier.
- Accounts can be used to eliminate or lower credit card fees by reducing the number of small transactions (and their associated transaction fees).
When used with pre-order options like kiosks or mobile ordering, you also get additional advantages:
- Past Order Recall allows employees to order and pay in as little at 8-10 seconds.
- Intelligent upsells based on the customer profile can increase check average 15%-20%
- Personalization allows each guest to see the menu accommodating dietary restrictions like Vegetarian or Gluten Free.
Finding the right account options for your café can lead to higher sales and improved guest satisfaction. Do your homework though – some 3rd party options can end up costing more than the credit card transactions themselves. Look for a native solution that is already built into the software like that offered by NEXTEP SYSTEMS. A small, flat, annual fee includes unlimited transactions and support is included as well.