New Payment StandardsEMV, ApplePay and Android Pay

Presented by Tom Epstein, CFECEO of Franchise Payments Network

What Does this Guy Know?

• Tom Epstein – CEO of Franchise Payments Network – the leader in Payment and loyalty processing for the Franchise space for 10 years with more than 160 Franchise systems supported.

• On the IFA Marketing and Technology Committee and heads up the PCI subcommittee.

• Written many articles for all Major Franchise publications and speaks at many conferences each year on Data Security for Franchisees among other topics.

• On the Data Security Counsel for the Electronic Transactions Association (ETA) the main association for payments professionals.

What is EMV?

So the deadline passed and my POS still seems to work

What about this Liability Shift?

There are two very important things to remember about the Oct 1st EMV Deadline:

1. In order to shift the total liability from your franchisee to the card issuers you would need to achieve 70% or more of your total transaction via EMV

Who Can and Can Not do that

Actually No one can do that at this time!

• As of Oct 1st there were only about 27% of the total cards in the market with Chips on them

Additionally

• If you are a membership franchise like a Message, Fitness, Tanning etc… you will never make this threshold due to your monthly membership transactions

• Sit Down Restaurants unless they adopt expensive pay at the table solutions

Is he talking out of both sides of his mouth?

The Chip transaction is a much safer Transaction

So for those 30% or so transactions that you do take you may be able to reduce your franchisees risk of Chargebacks on those transactions alone.

So when will all this really matter?

• This is going to be a slow migration

• It is estimated that it will not be until 1st quarter of 2017 before we will see 70% + cards with chips in the market

• All cards will continue to have the mag strip as well for the next 5-7 years – so are the chip cards really that much safe in the case of theft?

• Still much debate about requiring Chip and Pin vrs Chip and signature

NFC = Apple Pay, Android Pay

NFC

Why is this a potentially better solution in the long run?

• The card is never physically present at the time of the transaction

• The card number is tokenized via a onetime use token before it is transmitted to the POS so there is nothing for a hacker to try to decrypt

Conclusions

• All Merchants will eventually need to add EMV capabilities unless your business is 100% online

• You do have some time, but need to be addressing this now

• You should be communicating to your Franchisees what your plan is and why so they are not panicking

• If your going to upgrade to EMV you might as well do NFC at the same time for little to no extra cost.

Tom Epstein, CFE

CEO Franchise Payments Network

tomepstein@franchisepayments.net