A recent LA Times article highlighted the risk of what is referred to as “dine-and-dash” credit card fraud. With dine-and-dash fraud, a restaurant guest disputes a charge right after receiving an order whereas with “friendly fraud” the guest contests a charge once they receive their statement. The LA Times article points out that this kind of fraud has been on the rise during the pandemic and may become a permanent part of contactless card-not-present transactions. Now is the time to protect your restaurant from the increase in this type of fraud and the related cost. (See the original source: WSJ Credit Card Fraud On The Rise During the Pandemic)
In order to best manage and mitigate the costs of payments transactions and the potential for fraud, it's important for restaurants to understand the security differences between new technology chip (EMV) credit card payments and touchless credit card payments, and how the cost impact of fraud is based on the security levels.
- EMV credit cards and debit cards are a "card present" payment and use an embedded chip or NFC technology to provide unique identifying information (a PIN, signature, or other verification) validating the card owner's identity. This process is significantly more difficult to compromise and dramatically reduces the fraud exposure for credit card companies. As a result, the service fees are substantially less than "card-not-present" payments.
- Touchless "card-not-present" payments via a QR code or mobile app are not EMV transactions because they don't adequately verify the identity of the cardholder with a pin or signature. Because there is more risk for credit card companies, the payment processing fees are higher. Typically the merchant takes the hit if the charge is proven to be fraudulent.
The best way to protect your restaurant from increased payment processing fees or fraud charges is by selecting a best-in-class pay-at-the-table solution that provides EMV devicesor NFC technology for touchless payments.
Read fsrmagazine.com's article Restaurant Operators Know What You Are Getting Into With Contactless Payments for details on security and fees for dining paymentoptions.
Learn more about TableSafe Data Security and The TableSafe Advantage.