Multi-Unit Franchisee Magazine Issue II, 2016 | Página 100
Technology BY TOM EPSTEIN
Safety First
Reassessing your POS system
T
he October 1, 2015 deadline for
EMV-capable POS readers has
come and gone. And much like
Y2K 16 years ago, the world did
not end and most POS systems are still
working just fine.
As I am writing this, only about 40
percent of credit or debit cards in the
marketplace even have the EMV chip on
them, a number expected to reach only
around 65 percent by year-end. Banks
are dragging their feet on shipping these
cards. After all, why would they rush to
flood the market with cards that shift
the liability from you to them?
In addition, even if a consumer does
have an EMV chip on their credit or
debit card, about 60 percent of POS
terminals are still not enabled to accept
them. While we may be seeing EMVcapable terminals installed, the software
has not yet been turned on because of
programming issues.
With Visa’s Technology Innovation
Program (TIP), any merchants including “Level 4” businesses (those doing
fewer than 1 million Visa or MasterCard
transactions per year, i.e. the vast majority of franchisees) would be exempt from
the much-hated Annual Self-Assessment
Questionnaires if they can accept 75
percent or more of their total transactions using the chip technology. However, based on the penetration numbers
above, this is not likely to happen until
first quarter of 2017 at best.
One of the issues that has slowed
adoption from the merchant side is both
merchant and consumer unhappiness with
the time it takes for an EMV transaction.
Typically, it takes just 1 or 2 seconds for
a swiped transaction at a POS terminal.
But with the EMV cards, consumers must
dip or insert their card into the terminal and leave it in the device for about
20 seconds, greatly slowing transaction
times. Imagine how this has affected the
QSR industry, where speed of transaction
is of the utmost importance.
Nobody really wanted to deal with
this last October as they were moving
into the busy holiday season. I think the
96
speed-of-transaction issue may ultimately
push more franchisors and franchisees
to start paying attention to contactless
NFC technology. Almost all terminals
shipped with EMV capabilities also have
an NFC reader that allows for the faster
(and some might argue, even safer) Apple
Pay, Android Pay, and Samsung Pay NFC
transactions.
The silver lining is
that franchisors
are finally
taking a look at
their payment
technology
landscape and
taking this
seriously.
With the holidays over, I think many
CTOs are now pushing to get this done.
And even if it is impossible to reach that
75 percent threshold until perhaps early
to mid-2017, the transactions that do get
processed this way will be safer than the
swiped ones.
Who supplies your software?
Another issue I am looking at now is the
new Qualified Integrators & Resellers
(QIR) certification from the PCI Security
Standards Council. This is an assurance
that third-party service providers and
integrators meet the PCI Data Security
Standard (PCI DSS). Why should you be
concerned about this, since it should really
be an issue just for your POS vendors?
Here’s why. I’ve been speaking with
franchisors for years about their homegrown software and the need to get PCIcertified. In the past, these in-house systems were never mentioned specifically
in any PCI regulations, but I certainly
felt there could be some liability if such
a system were hacked.
Many service concepts, such as carpet
cleaners, handyman brands, and other
mobile franchises have developed their
own software combining CRM, estimating, and even links to a payment portal.
If your franchisor has a technology fee
that covers this, or charges you a direct
monthly fee for software, a good attorney for a consumer group that got
hacked would not have to work very
hard to prove that your franchisor was a
third-party reseller (since they are not
connected to you by a tax ID number, in
essence forced you to use the software,
and is charging you for it).
The deadline Visa has set for all Level
4 merchants to use only certified QIRs
is January 2017, about 9 months away.
Since it is no easy task and sometimes
a bit expensive, I would recommend to
all franchisors using their own proprietary software for credit or debit card
transactions to jump on this certification right away.
The silver lining with EMV is that
franchisors and their CTOs are finally
taking a look at their payment technology
landscape and taking this seriously. With
more than 400 separate breach cases in
2014 investigated by the FBI, this issue
is not going away anytime soon, and in
fact seems to becoming more common.
Tom Epstein is CEO and
founder of Franchise Payments
Network, an electronic payments processing company
dedicated to helping franchisors and their franchisees improve system performance,
increase revenue, and reduce expenses. Contact him at tomepstein@franchisepayments.
net or 866-420-4613 x1103.
MULTI-UNIT FRANCHISEE IS S UE II, 2016
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