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About the Forum

• Overview |
• Objectives |
• Purpose |
• Achievements |
• Ongoing Work |
  
• The Northampton Trial |
• Events |

Achievements

Since November 2003, In addition to running numerous Chip & PIN seminars, five main Forums have been held:

Forum 1 | Forum 2 | Forum 3 | Forum 4 | Forum 5

Forum 1

60 Hospitality Users were brought face-to-face with the PMO, Card Schemes and Acquirers.

• A question and answer session was facilitated so that the Card Schemes and Acquirers could understand the processes involved in accepting payment in hospitality and so that the users could understand the Chip & PIN transaction and what is expected to change when Chip & PIN is implemented.
• Much of the discussion in the first forum was around the impact, implementing Chip & PIN would have on operational processes. There was concern about pre-authorisation, top up, express checkout and post departure changes.
• There was an even greater concern when it was discovered that the standard practice of pre-authorising or taking a swipe of the card to help guarantee the tab in the food and beverage operation, was not in fact allowed by the schemes.

Forum 2

Held on Wednesday 28 January 2004 with 91 delegates attending.

• For the January Forum the Chip & PIN device suppliers were invited, so that the users would get the feel and look of the devices available in the marketplace.
• Forum 2 attempted to review questions and answers from the first Forum and view the Chip & PIN hardware available and attempted to update the Users with what is happening with the changes to Recommendation 15.
• There is no doubt, that a number of establishments were finding it extremely hard to cost justify the move to Chip & PIN. So Forum 2 also looked at ways in which the business case for the move to Chip & PIN could be made. The Forum introduced the concept of using value-added services such as Dynamic Currency Conversion to fund the implementation of Chip & PIN. Dynamic Currency Conversion operates such that if the guest chooses currency, the merchant shares in the gain on currency exchange when the Service Provider sells the currency on the foreign exchange markets. The share of the gain is then paid to the merchant monthly, by way of a commission cheque. This adds a very important contribution to the bottom line. Many merchants, attending, realised at Forum 2, the value that DCC added to the bottom line. They identified, that by offering their international customers the choice to pay in their own currency, that they would generate a new revenue stream, to help fund Chip & PIN. As a consequence, throughout 2004 and 2005, they have concentrated in implementing the DCC service while they awaited agreement, development and a stable platform for the introduction of Chip & PIN in this environment.

Forum 3

EPOS and EFTPoS Suppliers were introduced to the forum. Over 100 delegates attended.

• The third forum was about bringing the suppliers together with the users so that all could explore what needed to be done to ensure that what was delivered to the hospitality industry for Chip & PIN was suitable for that industry.
• Because of the competitive nature of the suppliers businesses, suppliers would not normally share information. However, for the forum that day the supplies were asked to leave that competitiveness outside and try to work together to openly discuss the issues that were preventing them from completing the development of their systems, such that they suit the ways of working in hospitality. We knew they were having issues with development, because many of the suppliers had spoken about these difficulties to Connie Penn in the previous number of months.

At the forum Connie Penn of Kilrush Consultancy said:

• A sub group from the Hospitality Users Discussion forum attended a PMO meeting in the PMO offices on 29 March and put forward a recommendation as to how a TAB transaction in Food and Beverage should operate.
• Another sub-group representing the hotel industry met with the PMO and agreed the "Cardholder Queries & Answers" document to cover questions cardholders might ask at check-in. Not all participants in the group were from the Forum, the PMO approached a representative number of people who had attended the first two forums to work with another group from the hotel industry.

Forum 4

Held at the invitation of HOSTEC at the Hospitality Show, Birmingham in January 2005. An update was given on the status of the queries the forum had raised during the previous year. Progress had been slow, but steady and the card industry certainly looked like they were taking some of the concerns of the industry on board. Forum 4 also saw the HCIMA take over control of the Forum, which has to be an enormous benefit.

Forum 5

Held at the Pub & Bar Show in April 2005

• During 2004, Switch changed its name to Maestro. Many establishments had some queries as to when they could or could not pre-authorise and how gratuity should be handled on Domestic and International Maestro Cards. At the Forum, S2 Cards who run Switch /Maestro gave an overview of Maestro. They helped clarify the subject and discussed the role of Maestro in hospitality.
• Some hotels had been told that they could no longer process “no show” transactions unless they had the full postal address of the guest and also submitted the “3-digit security code” from the back of the card. Implementing this requirement will expose the industry to a higher risk of fraud rather than control it and is totally unworkable. We have made significant progress in preventing this particular item from becoming a requirement. APACS delivered a 2-hour 'Customer Not Present' workshop on the subject. They confirmed that they felt the subject can become complex and certainly warranted this sort of attention. Both the HCIMA and APACS think it is important to explore and understand the vulnerabilities and liabilities of the various service delivery channels now emerging. The outcome of this engagement is that APACS are now supporting the industry in finding solutions to handling 'Card Not Present' transactions in Hospitality and since their participation in the forum in April 2005, have made significant progress in establishing a way forward. See further information under "customer Not Present" section.
• There is now a more standard and flexible approach as to when and how the gratuity is added to a transaction.
• In terms of Tabs, during the initial forums, the card industry indicated that under no circumstances would they tolerate tabs in Food & Beverage. They stated that is simply was not allowed. The hospitality attendees explained their need and their requirements for tabs and many lively discussions have taken place on the subject. Since then, significant progress has at last been made on this subject. The card industry has moved from a stance of "No Tabs on F&B" to allowing tabs for a fixed sum. Although this is not totally what the industry wants and needs, the fact that the card industry is now allowing some form of tab for F&B is very significant progress. This is totally due to pressure from the Users at the Forum. See separate section on Tabs
• So the Forum continues to reiterate the requirements of the hospitality industry, to the financial institutions, to ensure they respond appropriately to the unique requirements of this industry.
• One of the most important influences The Forum made in terms of hardware was helping the suppliers understand the importance of flexibility of devices within a single establishment. In retail one device, one solution sufficed for all the outlets across the group. But in hospitality this is not an option. The device used on reception at check-in can be very different from the more expensive portable option needed in the restaurant, to the one needed in the bar, which needs to be able to withstand spillage. Then in the leisure centre Chip & PIN brings the option to use Customer Activated Terminals [CATs]. The Forum helped crystallise the differentiation from retail. When the forum started there were very few suitable devices in the marketplace.

There are now many very robust and reliable units available for the hospitality industry.

• Portable handheld Internet Protocol (IP) enabled, multi-application devices are now available in abundance. They are opening up other huge opportunities for card acceptance and order taking. The introduction of these IP based technologies at the POS is one of the biggest advances in technology to touch the payment industry for a number of years. This significantly reduces dependence on legacy and proprietary network access controllers.
• A “Pub Proof” device was launched by Secure Retail Ltd at the “Chip & PIN Learning Pavilion” at the Restaurant Show in Olympia in September 2004. The hospitality forum had a direct influence in the production and design of this unit. It fits into the pub counter to facilitate fixed ordering points. The unit will withstand spillage of all types associated with the Club and Pub environment and is a very important addition to the suite of hardware that will be required for the variety of environments within an establishment.
• The first combined mobile EPOS and Chip & PIN device Clue® PINPOS from Bristol Office Machines has been launched. This is a fully certified mobile point-of-sale and Chip and PIN device with integrated Wi-Fi, Bluetooth, optional GPRS and optional barcode reader. This is a perfect solution for restaurants, bars, hotels, trains, taxis, ticketing and queue-busting at all sorts of events. An end to end solution with full EFT processing is in the final stages of accreditation in the UK. It uses fully approved and accredited components from DataCash, IBM, STS using a Dione device. This development has been strongly influenced by what the users identified they needed in certain outlets within their diverse environments. This development will allow order taking and payment to be done on the same device at the table, using Wireless, Bluetooth and in the open using GPRS.

On an extremely positive note we are proud to confirm that the hospitality industry is the only merchant category represented in the APACS Payment Group meetings. This group looks at the working practices and practical implications in the implementation of Chip & PIN. The Acquirers are now working directly with Connie Penn, to achieve this in the inter acquirer meetings held at APACS. They are also working with Connie to agree other additional business rules to meet the operating processes within the hospitality industry.

The successes achieved so far is the result of enormous effort in a number of areas - suppliers, the PMO and now APACS, card schemes and acquirers and the users, working with The Hospitality Forum. But particular tribute has to be paid to the users, who were willing to come together to:

• ensure their voice was heard
• to reassure the suppliers and industry that they were engaged as far as Chip & PIN was concerned
• to listen, debate and try to adapt their processes to meet the changing needs of the card industry as it tries to control bad debt and fraud

A Great Achievement

Almost two years on from the first Hospitality User’s Discussion Forum it is very gratifying to reflect that an enormous amount has been achieved This is such a positive outcome that today we feel Chip & PIN is achievable, has benefits and will offer the hospitality industry an opportunity to actually give a better service when the guest wishes to pay using a card.