EMV One Year Later: Merchants are Still Navigating the Process

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CreditCardForum new study reveals nearly 30 percent of largest US retailers are still not EMV compliant

CreditCardForum, the premier one-stop resource for and by consumers seeking in-depth information, opinions and advice on credit cards, released new research that found nearly 30 percent of the largest U.S. retailers are still not fully EMV compliant as the payments industry closes in on the one-year anniversary of its transition to chip cards and shift in fraud liability.

The study, conducted in September, examined the top 20 retailers by volume of sales according to the National Retail Federation and found six to be lagging behind in compliance – Costco, Safeway, McDonald’s, Publix, TJX and Yum! Brands (Pizza Hut, KFC, Taco Bell).

CreditCardForum President and General Manager Ben Woolsey said adoption rates vary across different industries. Quick serve restaurants have been one of the slowest to comply since they haven’t experienced significant card-related fraud to begin with so the incentive to incur the expense to upgrade their payment terminals and processes, not to mention inconveniencing their customers, is relatively small.

Consumers are still left guessing at transaction terminals whether to swipe or dip their new chip card. Many merchants now have EMV-capable terminals, but are not yet ready to use them in full EMV mode.

“Part of adoption reluctance may be on the consumer side as merchants understand their customer’s experience can be negatively impacted with an increased transaction time of 20 to 30 seconds when they use their chip card,” said Woolsey. “It’s a process that can be aggravating and confusing for the consumer.”

Another obstacle for merchants to overcome is certification. While EMV terminals have become readily available and merchants are prepared to upgrade, they must first have their bank or payment processor test and verify all of their terminals before their approved use, often slowing the pace of implementation.

“With the holiday shopping season approaching, we will more than likely see a decrease in EMV adoption,” said Woolsey. “Small and medium sized merchants with complex and customized payment solutions may not have the budget to hire the expertise to come in and convert their terminals to the new payment systems, especially during their high volume months.”

Last year issuers pushed the liability for card-present fraud to whichever party failed to comply with the new EMV standard, providing incentive to both card-issuers and merchants to make the move to EMV adoption. Those who didn’t would now be eating those costs. Additionally, merchants who have not made the move to accepting chip cards are also faced with a secondary burden – fraudsters who are focusing their efforts on less secure payment systems.

“Some smaller merchants who were previously considered low fraud risk and chose not to comply with the new chip standard are starting to see more fraudulent transactions, and moreover, many fraud tactics are moving online, as fraudsters have begun seeking the path of least resistance,” Woolsey said. “It’s important to note that though EMV is a highly effective method for preventing card counterfeiting, the most common type of card-present fraud, it is of no added benefit in stopping online or other types of card-not-present fraud activity.”

Though the slow adoption numbers may be startling as we approach the one-year deadline, the U.S. market still compares favorably to other countries that have already moved to EMV. Most smaller countries took several years for full compliance to reach 100 percent. Considering the complexity of the U.S. payments culture, things are moving along relatively well.


About CreditCardForum
CreditCardForum is the premier one-stop resource for and by consumers seeking in-depth information, opinions and advice on credit cards that also allows for immediate comparison and application to preferred cards.

Since 2008, the site has been the leading online community dedicated to consumer-driven education on the credit card industry. The user-contributed forum is enhanced by a hosted blog that covers latest industry developments that help consumers make more informed decisions regarding their credit cards. It also serves as a repository for key market data from multiple sources that provides a snapshot of the industry, backed by experts in the financial services and banking arena.

CreditCardForum is the go-to site for thousands of credit-card users each week seeking information and constructive peer-to-peer engagement with the aim of strengthening their financial bottom line.

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Amy Palmer
Account Executive
Leverage PR

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Amy Palmer
Leverage PR
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