Industry wrong-footed by chip-and-pin technology

Group restaurants and pubs are struggling to implement chip-and-PIN technology, despite being liable for claw-backs from credit card companies for fraudulent transactions.

From 1 January, the liability for fraudulent transactions switched from the banks to the hospitality companies, unless they had installed suitable chip-and-PIN technology. However, it seems that the technology hasn't caught up with the law and that many big chains have yet to install chip-and-PIN.

Derek Andrews, managing director of Pathfinder Pubs - the managed division of Wolverhampton & Dudley - says the company hadn't put in any chip-and-PIN terminals yet.

"We are not satisfied that the right machines are available from the bank yet," he says. "We hope to have it moving by the end of the summer."
He adds that the technology, although suitable for checkouts at retail outlets, had not been tested in hospitality: "I don't think the hardware has kept up with the principle."

Spirit Group, owner of the Bar Room Bar and Chef & Brewer brands, is the only large operator to have converted 2,000 food outlets to chip-and-PIN. It completed the rollout by 30 March, although some sites have requested additional hand-held terminals since then to cope with busy periods.

Spirit, though, is in the minority. One industry source says that many large restaurant or pub groups had decided that the levels of fraud were not high enough to justify the expense of installing chip-and-PIN technology that wasn't up to scratch: "They aren't feeling the pinch yet, but are keeping an eye on it."

Connie Penn, chair of the Hospitality Users Discussion Forum, agrees that the technology is only starting to catch up. She points out that many big groups wanted to integrate chip-and-PIN with their new EPoS systems rather than have standalone terminals. Pub group JD Wetherspoon, for instance, is installing both systems together.

Report by James Garner