Hoteliers make progress in upgrading to EMV readers
 
Hoteliers make progress in upgrading to EMV readers
12 JULY 2017 12:32 PM

Supply delays and certification requirements have slowed the installation of EMV credit card readers at hotels in the U.S., but now the pace is picking up.

REPORT FROM THE U.S.—U.S. hoteliers have been stymied in their efforts to install new EMV credit card readers at their properties through a lack of availability of devices and other issues, but some have been able to make progress over the past several months.

EMV readers in hotels have seen an increased pace of deployment as manufacturers have generally caught up to the demand, said Patrick Dunphy, chief information officer at Hospitality Technology Next Generation. Similarly, software updates, certification processes and standards adherence have increased as well.

“Several large hotel chains have deployed thousands of readers in the past six months,” he said.
“However, adoption in the franchisee environment is a lengthy and complex process for any technology deployment.”

Most major property management systems and point of sales systems providers now have support for EMV, and enough testing has occurred to streamline deployments, he said. PMS might need to be upgraded in order to support EMV, he said, so buyers should be certain that working integrations are in place and demonstrable for any technology.

Device integration
The conversion to EMV is an ongoing process, said Lou Schaab, CFO at Chesapeake Hospitality. The company’s independent and legacy Starwood-branded hotels have PMS systems with a functioning EMV solution in place, he said, but its Hilton- and InterContinental Hotels Group-branded properties don’t have a fully operational EMV solution yet as the brands are still working on those.

“We continue to research alternatives with a commitment to provide the most effective solution,” he said.

The delays in installing the devices were across the board, he said. There are some ongoing delays with brand PMS systems as well as certain POS systems in hotel restaurants and other outlets.

Provenance Hotels was able to install EMV readers at the Hotel 1000, managers of information services Garrick Moe said, but that was two months before the company sold the hotel. The company encountered shipping delays and device backorders before installing them, he said.

“There isn’t much you can do but wait,” he said. “There are only a handful of companies that make these machines, integration with your software developer further limits options and everyone is working on installing these at the same time. Patience is the only option.”

The devices worked well after the initial training period, he said. They are slower than swiping the card, he said.

“The biggest training issue we encountered, and it was relatively easy to overcome, was getting users accustomed to using the EMV reader for both swiping cards and manually keying in credit card numbers when taking a phone reservation,” he said.

For the remaining properties, he said he’s been waiting for Provenance’s PMS vendors to provide a certified solution that works with his company’s credit card processor.

“A common occurrence is that a PMS vendor may develop a solution with one (credit card) processor but not another, and so your only option is to wait or switch (credit card) processor companies, which can be a large undertaking,” he said.

The liability shift
To incentivize merchants to upgrade to the new security standard, credit-card issuing banks set a deadline of October 2015, which included passing over liability for fraudulent credit card charges into the hands of the merchants rather than the banks.

Hotels generally have a lower fraud rate than other verticals, as criminals typically will not stay in a hotel with a stolen card, Dunphy said.

“The liability shift is a bigger issue in retail or other verticals that criminals may quickly complete the transaction and leave the premises,” he said.

To address chargebacks more effectively, Schaab said his company’s employees are ensuring that they are swiping cards instead of just entering credit card numbers to prove that the card was present for the transaction.

“This has helped us in disputing chargebacks, and we win a majority of the disputes where we show the card was present for the transaction,” he said. “However, disputing chargebacks continues to be challenging when an EMV solution is not in place.”

Moe said Provenance is seeing minor lost revenue due to the liability shift, but that is only temporary.

“Until we get EMV installed, we are also spending more manpower monitoring security of (credit card) track data—the magnetic strip—being transmitted and stored briefly in an unencrypted format than we will once the EMV is in place,” he said. “We are also dealing with the increased burden of needing to store and encrypt full card numbers long term rather than just storing random tokens that are used with EMV. All these issues should resolve themselves once EMV is in place.”

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