The U.S. EMV-Accepting Merchant Base Grew by 400,000 Locations in 2018

The number of U.S. merchant locations accepting EMV chip cards grew nearly 15% in 2018 while EMV payment transactions rose 27%, according to new data from Visa Inc. 

In its latest report on the conversion of U.S. general-purpose payment cards from magnetic stripes to EMV chips, Visa says 3.1 million U.S. card-accepting merchant locations, or 68% of the total, could process EMV cards in December, up about 400,000 locations from 2.7 million a year earlier. The chip-card-accepting merchant base was little changed from September’s 67% rate, but well above the 59% rate in late 2017.

Some 511.1 million, or 71%, of Visa-branded cards now have chips. That’s an increase of 29.3 million, or 6%, from 481.8 million cards in December 2017, when 67% of the network’s card base had a chip. Visa says 297.5 million of its debit cards and 213.6 million of its credit cards are now EMV-enabled.

Payment volume on Visa chip cards totaled $88.9 billion in December, up 14% from $78 billion a year earlier. The EMV transaction count jumped nearly 27% to 1.9 billion versus 1.5 billion in December 2017. Visa defines a fully-enabled merchant location as one where 75% of card-present payments are chip-on-chip: an EMV card read by an EMV-enabled terminal.

The main purpose of the EMV conversion was to thwart counterfeit fraud, to which mag-stripe cards are highly vulnerable. For merchants that accept EMV cards, dollars lost to counterfeit fraud as of September were down by 80% compared with September 2015’s losses, Visa says. Counterfeit fraud losses for all merchants are down 48%.

The EMV conversion officially began in October 2015 when the card networks imposed liability shifts that forced merchants to absorb financial losses from counterfeit fraud if their point-of-sale terminals couldn’t accept chip cards. Earlier, issuers largely bore the brunt of counterfeit fraud. EMV’s big growth years were 2015, 2016, and 2017 in the wake of the liability shifts.

Now fraudsters are migrating to other channels, including online commerce and account takeovers.