Friday , March 29, 2024

Don’t Hold Your Breath Waiting for EMV

It should come as no surprise that, despite an Oct. 1 deadline, most consumers and merchants remain unprepared for EMV. But with less than a month to go, separate studies released late this summer indicate the situation is even worse than you may have thought.

Both merchants and issuers are struggling to adopt the standard, the studies show. They also indicate yawning gaps in consumer and merchant education about EMV. Merchants must be equipped to accept EMV cards by Oct. 1 or take responsibility for fraud losses stemming from counterfeit or lost-and-stolen cards, according to card network rules. That liability is currently shouldered by issuers.

A survey conducted July 9-13 by the Associated Press and market researcher GfK indicates that, of the 41% of U.S. adults who have received a new card this summer, just 30% have received a chip card. That works out to 13% of all Americans, according to the AP and GfK, whose survey canvassed 1,004 people.

Among the people who have received a chip card, just 35% have so far used it for an EMV transaction. Most EMV cards are being issued with mag stripes as well as chips, so consumers can still swipe the cards if merchants aren’t equipped with chip readers.

Meanwhile, while most Americans who have received a chip card say they understand how to use it, most also say they don’t understand why they’ve received it, according to the survey.

The AP-GfK poll was conducted online.

Nor is the situation with merchants looking any more sanguine. The issues confronting mid-size merchants when it comes to EMV certification with processors for POS systems are already fairly well known, but among small merchants the challenges have more to do with awareness and education.

A separate study shows that most small U.S. merchants still aren’t aware of the card networks’ impending EMV liability shift, let alone prepared to accept EMV cards.

Only 49% of merchants that have up to $20 million in annual revenue and that accept payment cards say they are aware of the Oct. 1 deadline, according to the Wells Fargo/Gallup Small Business Index poll, conducted July 6-10. The survey contacted some 600 business owners, of whom 41% accept debit cards and 35% take credit cards.

Among the card-accepting merchants, just 31% said they have installed equipment to accept EMV cards. As for the other 69% that aren’t ready for EMV, only 29% said they plan to install the needed equipment by the deadline. Just over one-third said they’ll do it, but some time after October, and another 21% have no interest in upgrading at any time.

They survey also asked the lagging and not-interested merchants why they won’t become equipped for EMV in time to avoid the liability shift. Forty-eight percent said they don’t think upgrading will do anything for their business, while 46% don’t want to shoulder the equipment, software, and training cost and 41% aren’t worried about the fraud potential.

“While our industry has made great progress in the last year informing and preparing small-business owners for the EMV liability shift, the survey findings show us that we have more work to do,” Debra Rossi, head of Wells Fargo Merchant Services, said in a statement accompanying the release of the survey.

In other results, the survey showed 15% of respondents accept point-of-sale mobile payments through a mobile-enabled reader.

—John Stewart

Check Also

Discover CEO Leaving and other Digital Transactions News briefs from 3/28/24

Michael Rhodes has resigned as chief executive and president of Discover Financial Services Inc., effective April 1. …

Leave a Reply

Digital Transactions