Finance: Chipping in
Do you have Chip & PIN in your pub yet? Whether you do or not, it's worth knowing what your options are. Phil Mellows reports.
You might think you've got more important things to worry about than Chip & PIN. And there are so many issues dogging the pub trade today that you might be right. Still, if you've got a minute, it's worth a little thought.
To begin with, are you compliant yet? From January 1 this year retailers have been liable for any fraud committed with a Chip & PIN card - meaning banks could pass the cost onto you. With people increasingly paying by plastic, even in a traditional cash business like a pub, as food trade grows you have to take this seriously.
In fact, fraudsters are expected to target non-compliant businesses, which is the last thing you need in a food and drink industry which already bears the brunt of the UK's £100m-plus card fraud bill.
While the banks are happy with the Chip & PIN roll-out so far, it's not yet 100 per cent, and it's likely that there are pubs lagging behind. Licensees would not have been encouraged by the confusion and misleading statements that are still flying around.
For instance, until the end of 2005 you will find customers who only have an old signature card and, as long as you carry out the usual checks, the banks will still pick up the bill for fraud on these, despite advice you may have heard to the contrary.
As a card-accepting small business, you should have been offered a Chip & PIN terminal, which makes it easier and cheaper. But you could be missing a trick.Investing in your own hardware - as the major pub chains have done - has a number of advantages, as EPoS suppliers are obviously eager to point out.
Keith Rochefort, managing director of I-Control, notes that "the trade has been surprisingly slow on the uptake. There has not been the rush to Chip & PIN systems the banks predicted.
"People don't understand the benefits. They think it's just something else that is going to cost them money. The banks say 'take our machines' and independent retailers feel their hands are tied. They don't realise they have a choice."
The most advantageous choice is a Chip & PIN terminal that is fully integrated into your till system, meaning, for instance, you don't have all the time and paperwork involved in reconciling your tills with your bank statements.
"An integrated system combines retailing and payment," explains Mark McMurtie, marketing director at Retail Logic, one of the largest companies that has been helping big retailers comply with Chip & PIN.
"Because it is one system there is no double-keying. You're not duplicating work and there are less errors - it's easy to key in £2 instead of £20. Plus, you get the sales information to go with it and you can share peripherals, such as a printer," he says.
"It simplifies the transaction, it's much faster. In a busy bar you don't have people hanging around waiting to pay, so there's a customer service angle, too."
Another win from an integrated system is the possibility of using hand-held portable systems, linked to your tills through a broadband wi-fi connection. If you do table service, staff can complete the transaction at the table with a minimum of fuss.
This, again, is speedier and has the additional security benefit in that the customer does not have to let their card out of their sight. Research has shown that people feel particularly uncomfortable these days about letting staff walk off with their card, fearing it will be "skimmed" for details.
You might even save on bank charges. "It's a common myth that you have to use your own bank for Chip & PIN," says Mark. "Going your own way puts you in control and gives you a greater negotiating power with banks - and that could mean better rates."
"Don't be bullied by your banker," adds Keith. "Talk to as many people as possible. Look at two or three systems and get advice on what's really best for your business. There are a lot of peripheral benefits you can have, stock control for example, but you won't necessarily benefit from having everything."
