Chaos looms for restaurants – so sack the bank

Despite a 12-month lead up to compulsory credit card PIN numbers, many restaurants are woefully unprepared for the impending switchover. The banks, more focused on their mortgage clients, have disgracefully neglected these small business customers.

The head of the Restaurant and Catering Industry Association of Australia, John Hart, told me yesterday that only about 20-30 per cent of his members are ready for Friday’s big switchover to compulsory credit card PIN numbers.

It seems chaos is about to descend upon the restaurant business. If you eat out this weekend, take cash. There’ll be no more handing over the credit card and then signing the chit when it comes back, with a hastily calculated tip to be added when the waiter gets back to the till.

From August 1 the waiter will have to bring a terminal to the table so you can key in your PIN, no ifs or buts, and according to the industry association three quarters of eateries are unprepared.

Well, gee, they’ve only had 12 months to get ready. Exactly a year ago, Visa and Mastercard declared that August 1, 2014, would be the start date for mandated PIN numbers in Australia to improve credit card security, and they had been talking about it for years before that. It was no surprise last year and certainly is no surprise now.

Yet many restaurants simply won’t have enough wireless eftpos terminals to ensure that customers aren’t kept waiting when they finish their meals, and more importantly they haven’t worked out what to do about tips. Will they dry up? Will staff have to be paid more?

So how could virtually an entire industry be so poorly prepared for such an important and well-flagged change to their business?

I blame the banks. If what John Hart says is true, and plenty of anecdotal evidence suggests it is, then the banks have shockingly neglected this group of their small business customers and have a lot to answer for.

It’s not all that surprising, really, considering the clear focus of banks in recent years on home mortgage customers and big corporates, while ignoring small businesses and slugging them with a big relative increase in borrowing rates.

The banks should have been working with their restaurant customers for at least 12 months to ensure they had enough terminals and they had ones that would deal with tips and bill splitting – that is, wireless eftpos terminals that prompt for a tip and can handle split bills.

They certainly exist, but from what I understand the banks are in various states of disarray on this subject, and have left their customers with insufficient terminals and the wrong sort.

Commonwealth Bank of Australia is apparently best prepared of the big four, and the non-bank start-up payments firm, Tyro Payments, has also been working on new terminals that can prompt for tips and deal with split bills, and is planning to use August 1 as an opportunity to grow market share.

And, indeed, any restaurateur who finds himself or herself high and dry on Friday should sack the bank immediately.

Some have suggested that whatever happens, the move to mandated PIN numbers instead of signing will spell the end of tipping in restaurants, as Cabcharge already has in taxis, and that fear is why the US has been reluctant to join the global move towards more secure PIN numbers.

With a lower minimum wage, tips are vital to the US hospitality industry.

But there really is no need for that to happen. Every restaurant should have been ready this Friday with sufficient terminals that ask diners whether they want to pay a tip before entering the PIN number – either as a percentage or dollar amount.

There’s no excuse for being unprepared, and for your staff to miss out on tips.

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