By John Buchanan
It's been just over four months since the Europay, MasterCard and Visa (EMV) liability shift, and this transition has been one of the most monumental challenges our industry has ever experienced. It's a major shift for both businesses and consumers, and we're only at the beginning. The initiative has had its delays and challenges, but we are making progress. And merchant level salespeople (MLSs) need to understand why EMV adoption has been slow, what we can expect in the short term and what the future holds for us.
The EMV transition has caused frustration; many wonder why it's taking so long. Some consumers have yet to receive chip cards; some banks haven't even begun to ship out chip-enabled cards. And consumers with chip cards sometimes aren't able to use them in stores due to the delay of EMV readiness with POS devices.
One of the biggest challenges merchant services providers faced, or may be still facing, is the EMV certification process. EMV certification consists of three levels, and it requires the payment device to certify with EMVCo and the individual card brands. Certifying POS devices is time consuming, and both EMVCo and the card brands have received numerous certification requests from merchant service providers.
In addition, there are several other reasons why businesses have not yet made the upgrade. Some small businesses believe EMV doesn't apply to them, think the equipment is too costly or are unaware of EMV entirely. Also, the liability shift fell right before the year-end holiday season; many merchants were hesitant to make a major change to their payment equipment at such a busy time of year.
In Cayan's recent EMV webinar in collaboration with 451 Research, Jordan McKee, 451's Senior Analyst of Mobile Payments, discussed how at the end of November 2015, 60 percent of POS devices still hadn't been upgraded to accept EMV. By the end of this year, the statistic is expected to drop to 40 percent. That figure is still concerning, but it's also an opportunity for MLSs to educate merchants and gain new accounts from laggard businesses.
While in conversations with small business owners who think EMV doesn't apply to them or it's too costly or too bothersome to switch equipment, it's important to educate them and focus on the importance of the upgrade. Explain that EMV applies to all businesses and how making the upgrade will protect both their businesses and their customers from counterfeit fraud. Merchants will be better off buying new equipment rather than facing the significant financial consequences if a fraudulent transaction were to occur at any of their locations.
Although the industry is focused on the EMV shift, near field communication (NFC) technology and mobile payments shouldn't be overlooked. EMV is predicted to be a major driver of mobile payments, as consumers are expected to prefer mobile payments over EMV. The process of "dipping" or inserting a chip card takes longer than simply swiping a credit card. In today's fast-paced world, impatient consumers want faster, easier transactions, which will draw them toward mobile payments.
The good news for merchants is that 80 to 90 percent of EMV-capable POS devices today are also NFC compatible to accept mobile payments. This means businesses that upgrade their equipment will reap the benefits of both EMV and NFC, allowing consumers to pay however they want, providing an improved customer experience.
Although we have a long way to go with the EMV transition, educating your merchant customers and prospects is a critical step on the road to success with EMV. Now is a great time to take advantage of these opportunities to capitalize on EMV and NFC technologies.
As Cayan Director of Third Party Sales, John Buchanan oversees all sales activities within the company's agent channel, a growing network of more than 400 independent representatives throughout the United States. John has served as a key leader within the organization since joining the company in late 2007. For over eight years, he has made numerous contributions to the development and continued growth of the agent channel. John is a graduate of Eastern Connecticut State University where he earned a bachelor's degree in business administration. Contact him at firstname.lastname@example.org.
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