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Monday, 28 July 2014 16:00

Here's a tip - signatures out, PINs in this Friday for credit, debit card payments Featured


It might get a bit messy in some restaurants, cafes and pubs around the country on the first day of August, this Friday, when signatures are officially abolished on all credit and debit card payments, to be replaced by PINs.

Despite publicity and advertising campaigns over recent weeks, will customers know that on Friday they can no longer sign their credit or debit card when paying their bill, and can now only use a PIN? Have they contacted their bank or financial institution to set up a PIN for their credit or debit card?

Well, according to EFTPOS merchant payments provider Tyro, it may be absolute ‘chaos’ on Friday when signatures are abolished and there’s no alternative – customers will be forced to use a PIN to process their credit or debit card payment. Or, good old fashioned cash will do – that’s if you remember to cash-up your wallet before going into the restaurant, café or pub for that end-of-week meal or a few drinks.

And, a quick straw poll of a couple of my local cafes here in suburban East Melbourne seem to confirm Tyro’s fear of potential chaos and what they see as potentially ‘the death’ of tipping.

The café owners I spoke to were, of course, well aware of the changeover to PINs this Friday. The financial institutions have done a good job informing them of the impending changeover, but they were not so sure about their customers.

“Yes I think it could be really confusing. I’m just not sure if everyone knows they can’t use signatures from Friday onwards. We’ll just have to wait and see, but I think it might be a real problem.”

This café owner said that many of their corporate/business customers do use credit or debit cards to pay for meals, opting to sign for the bill, and he’s just hoping they will know that it will now require a PIN.

He also agrees, as pointed out by Tyro Payments co-founder Andrew Rothwell, that tips may be a problem as customers who tip for good service usually include the extra amount in their credit or debit card payment, usually made using a signature.

So, if my local café proprietor and Tyro are right, cash could be king for a while until everyone catches up with the news that signatures are out and PINs are in.

Tyro’s Rothwell says the change “could spell the death of tips from grateful customers” as chaos looms for Australia’s 37,700 restaurants, cafes and pubs.

“Imagine cardholders searching in panic for cash to offer a tip, because they can no longer offer this as part of the signature process.

“Tipping is likely to be the casualty of PIN transactions with tips expected to fall by double digits, similar to the UK experience.”

According to new research by Tyro, PIN usage increased from 59% to 78% between November 2013 and June 2014 for 10,000 small-to-medium businesses, including many restaurants, cafes and pubs.

However, Rothwell says eating places and restaurants are laggards with 66% PIN usage, reflecting the “lack lustre acceptance of mobile terminals” and the waiter staffs’ fear for their tips.

“Currently customers can insert a tip at the bottom of the credit card transaction when they sign for the bill at their table, but with typical PIN transactions the amount is locked in at the front desk when staff key in the details.

“That means the only way customers can offer a tip is to dig into their own pockets and provide a cash tip on top.

“It could see the end of tipping as we know it, which is a key source of income for restaurants and their staff.”

Of course, with Tyro being an EFTPOS payment system for merchants, Rothwell is quick to point out that the solution to this problem, however, is available today.

“A simple, fast and secure payment process integrates the restaurant management software and the payment terminal, allowing patrons to use the EFTPOS terminal at the table at their own pace to nominate the amount they want to pay, split the bill, tip and pay using their PIN,” Rothwell says.

“It also makes restaurateurs’ lives easier when reconciling payments at the end of the shift.”

Tyro launched its mobile EFTPOS technology two years ago working with the hospitality community developing and testing its solution.

“We beat the big banks,” Rothwell said.

“With appropriate wait staff training, to give customers privacy when paying with the terminal, and Tyro’s easy to navigate workflow on the terminal, loss of tips need not be the nightmare restaurateurs imagine.

“We knew that customers and restaurateurs would be impacted by the change and have worked on a solution that would ensure that nobody would be unnecessarily inconvenienced.

“Tyro’s solution is supported by diners, restaurant staff and restaurant managers who no longer have to spend lonely nights, after staff have gone home, punching numbers into terminals to process tips.

“The PIN requirement puts the customer back in control. It’s virtually impossible for a fraudster to ascertain a PIN, while forging a signature is easy. Our wireless integrated pay at table EFTPOS system is a perfect complement to eliminating credit card signatures,” Rothwell concludes.

And, Rothwell lists what he says are the benefits of using Tyro’s integrated EFTPOS terminals:

•    Current users of the terminals have reported positive outcomes such as halving the number of trips a waiter makes to the table to close it off

•    The end-of-day reconciliation and tip completion cease being problems for the restaurateurs

•    Customers never lost sight of their credit cards as they did in the past, which means they have total security over them

•    Diners have a broader choice of cards. They will no longer be limited to today’s signature based credit cards, but will be able to use Australia’s popular EFTPOS debit card at the table

•    Restaurateurs using mobile terminals potentially save in merchant service fees when their patrons use the EFTPOS debit card instead of a credit card.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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