Last month, I attended a private shopping event in Chicago held by my favorite cosmetics brand. Upon arrival, I could hardly get into the showroom no thanks to the massive line around the entire shop. I neared the counter to investigate the issue, and found the culprit I had feared was causing this hold up: the EMV chip terminal. Once I finally made my selections and reached the counter, the merchant had abandoned all hope of getting the terminal to accept chip cards.
This scenario is playing out across the country. It’s been more than half a year since the US EMV liability shift and fewer than 40% of merchants are ready to accept chip cards. And, despite the roughly 5 million EMV-ready terminals present in retail stores, only 20% of those card terminals are actually ready to be used. Why is this the case?
According to Michael Moeser, director of payments at Javelin Strategy and Research, accepting EMV is a two-step process. Once an EMV chip reader is acquired, a merchant needs to download the appropriate software to allow the terminal to accept chip cards. Then, the merchant needs to be certified with the card networks, a process that now feels arduous with the amount of merchants trying to become compliant long after the deadline to do so has passed.
“Just because you see an EMV slot on a terminal, doesn’t mean it works,” said Moeser. Not quite the feedback retailers hoped to hear at this stage in the shift – especially those who have outfitted their stores with expensive new terminals. Counterfeit transactions that have occurred at these locations could have been prevented, and instead, businesses are being forced to eat that cost.
The struggle is real for shoppers, too. US consumers hold 600 million of the chip cards in circulation but are growing frustrated by the long wait times to make a retail purchase, especially when they won’t be held liable for fraudulent transactions if liability now falls upon the merchant.
In an effort to alleviate the long lines and wait times, Visa and MasterCard have recently created new technologies that will make chip card transactions faster and more convenient for consumers.
But, what it really boils down to is patience – from merchants and consumers alike.
“This is the biggest change in the payments industry in 40 years,” ETA spokeswoman Meghan Cieslak told the Chicago Tribune in a February interview. A disruption in the status quo for payments this big is by no doubt going to cause some commotion in the industry.
But, with time comes ubiquity and understanding. What consumers and retailers need to understand is that all this commotion is really about keeping consumer data safe and secure and merchants protected against the threat of fraud. Surely, that alone makes the EMV chip card migration worth the wait.
Whether you’ve adjusted to the changes or not, EMV is only going to continue to gain prominence in how we make and take payments. Have you made the switch? If you’re hesitant, what’s the holdup? Let Payline help you make the switch.