With the Oct. 1, 2015, Europay, MasterCard and Visa (EMV) deadline behind us, the industry continues to monitor U.S. migration rates and chip card distribution in order to predict progress. And, based on current data, it looks like the nation's move to full adoption of EMV-compliant payments will last for another two years in merchant categories that were given the 2015 deadline, and perhaps even longer for petroleum retailers, whose EMV liability shift will occur two years hence.
However, a lot can happen in two years in the payments industry. Indeed, with the consumer demand for mobile payments increasing, EMV could be a thing of the past by the year 2017. Dozens of alternative payment companies that use smartphone apps, mobile platforms and technologies such as near field communication (NFC) have emerged this year.
Many of these newcomers are infused with millions of venture capital dollars; each carries the promise of becoming the next revolutionary solution for consumer commerce. There's no telling how fast these solutions will be embraced, but the slow pace of EMV adoption may give them an edge.
In addition, while consumers are reveling in novelties such as person-to-person payments and crypto-currencies, retailers are grappling with how to help their staff on the sales floor and their customers adapt to the EMV authentication process. Many merchants are so far behind in the transition, they haven't begun teaching store employees how to accept EMV card payments.
Telila F., an Assistant Manager at a prominent chain of quick-serve convenience stores, told The Green Sheet she had no idea the new POS machines installed at her stores several months ago were equipped with the EMV chip readers until a customer tried to insert a card into the machine's slot. Nor did her corporate office explain that the transition was part of a nationwide effort to combat fraud and protect consumer bankcard data.
"We were told customer transactions would be handled just like they were before," she said. Telila also noted that as of Oct. 10, nothing else had been communicated to her or other store managers about the liability shift, and she had no idea when the chain was planning to begin accepting chip transactions at its stores.
Another retail clerk from the big-box brand Best Buy Co. Inc., expressed concerns about the longer period of time the EMV process is taking to clear. "These chip cards take three times as long to process," Brent B. said, "I'm afraid it's going to slow down our holiday lines even more, and that won't be good for business."
The longer time at the POS that EMV authentication typically entails may inadvertently leave the door wide open for contactless payments. Rick Taylor, President and Chief Executive Officer at BridgePay Network Solutions LLC, an EMV-certified gateway and middleware provider, said, "By default, contactless payments are soon going to be in high demand in the marketplace, as contactless is a faster transaction than having to dip your card."
Indeed, the majority of EMV-enabled terminals that have found their way into the marketplace are also capable of receiving contactless payment data via NFC protocols. However, just like EMV chip card readers, NFC is receiving scant attention at retailers. Taylor noted that while these technologies are gaining a foothold at the POS and among consumers, many merchants are still wondering when they will be EMV ready – contact or contactless.
Taylor and others believe this period will be short-lived. "Many merchants with EMV-enabled machines will likely want to activate them prior to the holiday rush to avoid the risk of fraud liability, but it may take the chaos of a holiday season for merchants and customers to realize that contactless payment technology is the only way to go."
Of course, at the current pace of EMV adoption, it could mean the marketplace as a whole still has two more years to reach this conclusion. The high probability that newer, more novel payment technologies will be introduced into the market along the way, this could be a blessing or a curse to merchants, depending on where they are in their own EMV migration, and how fast they are able to incorporate new technologies.
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