EMV is now six months into effect and has made great strides throughout the U.S. thus far. By now, most consumers have already received the new EMV chip cards from their issuing bank and have begun to use them at various retailers. However, many merchants who have the upgraded EMV terminals are advising customers to swipe their card to make a purchase instead of dipping their card in the EMV reader. Why is that?
Longer Checkout Lines
Several merchants have purposely disenabled their EMV terminals to process EMV transactions, since many consumers are still unaware of how to use a chip card properly. Because of this, merchants are experiencing backups in their checkout lines by having to help customers’ process EMV transactions. Most merchants view this situation as a negative, as EMV has shown to slow down the checkout process.
"Unless an owner is there 24/7, the employees are going to do what's most convenient.. If there are too many people in line, or the customer says it's taking too long, they're just going to opt for the path of least resistance,” said Steve Eazell, president emeritus and board member of the Western States Acquirers Association.
Lack of Software
Another main issue is many of these EMV terminals do not currently have the capable software installed to process EMV transactions. Since the liability shift has forced merchants to purchase and upgrade their terminals, they have gone ahead and installed EMV-capable terminals in-store without the compatible software ready to go.
"To be able to use EMV, they have to put that software in and then do a number of certification tests to make sure the terminal works correctly and to make sure the processor can actually see transactions coming in," said Mansour Karimzadeh, managing director and chief technology officer for the SCIL-EMV Academy.
Merchants are not entirely at fault for why EMV software has not been properly installed. In fact, the payments industry as a whole is partially to blame for the lack of deployed EMV software as many acquirers, merchants, and consumers were delayed in launching EMV technology.
"If you've never been a bank or processor, you have no idea about how hard it is," spoke Linda Perry, a payments consultant who previously worked for Visa Inc. "And you have to get it right, because the merchant's got to wake up the next morning and have it work.”
Future Success of EMV
Although the U.S. is one of the last industrialized countries to integrate EMV technology, the conversion rate so far has been fast within the past few months compared to other countries during their first year. The U.K. took over eight years to reach 90% conversion to EMV, while the U.S. is projected to hit 90% in only three years.
In order for EMV technology to continue to succeed, there are several organizations that need to continue pushing integration of EMV technology:
- ISOs need to describe in detail to merchants why they need to incorporate EMV technology and how it will benefit them.
- Banks that issue chip cards need to offer consumers information around EMV technology so they too can become educated on how EMV works.
- Consumers need to request merchants to use EMV terminals with EMV software so they can dip their chip card instead of swiping at the terminal.
- EMV equipment and software providers need to make the checkout prompts user-friendly so consumers and merchants can comprehend the instructions on how to process an EMV transaction better.
Although EMV transactions take slightly longer to process than swiping a card, merchants need to start enabling their EMV terminals for the protection of their business. The enhanced security features EMV offers is better than the potential negative impact of experiencing an instance of fraud. As the migration to EMV technology continues to expand within the U.S., payment industry experts should continue to push the adoption of EMV solutions for heightened security.