Tomorrow marks an important milestone for EMV technology in the United States and the beginning of a new era in the payment industry. Failure for not being EMV ready could cause financial damage to merchants. Yet, most merchants within the U.S. are still not prepared for the liability shift, despite knowing the consequences for not being EMV compliant.
EMV Adaption Rates Still Low
The Strawhecker Group did a recent study with 62 payment service providers that were accountable for 2.4 million U.S. merchants. The study proved that U.S. merchants were not only unprepared for EMV, but also did not consider EMV to be an urgent requirement for their business. Likewise, only 27% of U.S. merchants were said to be ready to accept EMV cards by October 1st and acceptance rates are expected to be less than 50% by June 2016.
Mike Strawhecker, Principal at The Strawhecker Group, gave some insight on why EMV adaption has been slow in the U.S. stating:
“With low EMV-readiness estimated just two weeks away from the deadline, it is clear that this process has been far more complicated than in other geographies where it has been implemented before, due to the sheer size and complexity of the payments industry in the U.S.”
What Is Holding Retailers Back From Adopting EMV?
Another report conducted by Software Advice surveyed how confident small business merchants were in being able to meet the EMV liability shift. The results showed the following:
- 22% Already have EMV terminals
- 22% Moderately confident on meeting the deadline
- 17% Minimally confident on meeting the deadline
- 13% Extremely confident on meeting the deadline
- 11% Very confident on meeting the deadline
- 9% Not at all confident on meeting the deadline
- 7% Unaware of deadline
In fact, 34% of merchants claim lack of time researching and implementing EMV as the primary reasons they are not able to meet the deadline. Cost and expense of EMV technology was another key issue, with 33% of retailers citing that being a drawback. Merchants will not only have to upgrade POS systems to support EMV technology, but will also have to replace their card readers and hardware used to assist with the transaction.
Although expensive, switching to EMV products sooner rather than later could save your small business thousands of dollars if an incident of fraud were to occur - as merchants who are not EMV compliant will now be held liable for fraudulent charges.
“The thing that non-compliant retailers really have to ask themselves is, ‘Is the potential liability that could come from credit card fraud greater than the time or money it might take to adopt an EMV-ready system?’” spoke Justin Guinn, market research associate for Software Advice.
With the EMV liability shift arriving tomorrow, retailers need to become proactive immediately on updating their solutions to EMV compliant products. Waiting too long will put retailers in the position of being fully responsible for fraudulent charges, until they switch to EMV technology.
Take charge of your business and learn the benefits of switching to EMV terminals.