EMV, also known as chip and pin technology, has gained a huge presence in the US in the last few years with thousands of merchants adopting EMV-compliant point-of-sale (POS) terminals and additional software for their businesses. Yet, many establishments remain on the back wagon of the great EMV migration.
Since the liability shift in October 2015, merchants who have not implemented EMV POS systems are considered liable for any fraudulent credit/debit card transactions that occur in their establishments via a swiped EMV chip-enabled card. Establishments such as gas stations and ATMs, however, have had their liability shift deadlines extended due to impediments related to their unique infrastructure.
Card issuers like MasterCard, Visa, American Express and Discover have shifted their liability deadlines for gas station POS terminals to October 2020. MasterCard's liability shift for ATMs was October 2016, and Visa's is October 2017.
The top five biggest obstacles that have likely prevented merchants from becoming fully EMV-compliant are:
Costs - For larger businesses who may have hundreds of locations across the nation, the price of switching over to new hardware can definitely add up. In an effort to reduce costs, enterprises should re-examine their business operations to identify whether or not they can streamline their processes, or if they already have chip-ready devices and may only need new software. In these cases, it is more efficient to invest in custom development to upgrade existing systems to meet the specific needs of your business.
Pending Certification - Merchants have updated their POS terminals and software before the deadline may still be unable to accept EMV card payments due to pending certifications from issuing banks and payment processors. As a result of a backlog of requests from retailers who are trying to get certification, vendors simply do not have the sufficient resources to efficiently handle the growing number of cases. This has caused many merchants to seek other alternatives and hold off on purchasing new EMV devices until they can be guaranteed prompt certification.
Untrained Staff - Every new piece of equipment that is implemented into business operations requires a decent amount of training so that staff members can easily operate the new machinery and be able to handle any questions from customers concerning these new technologies. Depending on the size of the business, merchants may not have the manpower or resources to educate every employee. In most of these cases, it is often preferred to bring in experts who understand the equipment and can educate staff on how to properly use it.
Concerns with Transaction Speed - As more and more merchants become EMV-compliant, consumers are growing accustomed to using chip and pin payment methods. Concerns with the speed of the transactions, however, remains a large concern for retailers and customers alike. EMV smart cards must be "dipped" into the POS terminal rather than swiped and must remain in the slot in order for data to transfer properly from the chip and allow a unique transaction code to be created. Though this process is significantly more secure than traditional methods, it can take anywhere from a few seconds to a full minute depending on the vendor's software, which can lead to an increase in customer complaints and result in fewer clients. To remedy this situation, MasterCard and Visa have begun looking into providing new technology options to processors who can then offer these to merchants.
Indifference to Liability Risks - Merchants who have yet to become EMV-compliant face the risk of being held liable for fraudulent transactions that occur as a result of a swiped EMV smart card. Many small businesses believe they have a low risk of fraud due to the low number of transactions they process; therefore, the cost of upgrading entire systems outweighs the risk of possible fraud. Even so, EMV is quickly becoming a standard method of pay, so it will be worth the investment in the long run. Most large chain stores have already implemented EMV POS systems to deter criminals. These individuals can likely begin targeting small businesses and those retailers that have not adopted EMV since they are more vulnerable.
The road to EMV adoption is one that will help your business be more secure. Merchants may even use this opportunity upgrade POS terminals to not only accept EMV smart cards, but mobile payments like Google Wallet, Apple Pay, and MasterPass, which are also growing in popularity. Customizing existing POS terminals, rather than investing in entirely new hardware/software, could also help merchants reduce expenses and provide an even more comprehensive and secure system for payment processing.
Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.
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