Chip cards have been one of the most significant changes faced by retailers in the U.S. in recent years. However, the switchover has been far from smooth with merchants facing delays in their terminals being certified, and some small businesses have been slow to introduce the new technology.
70 percent of consumers now have chip cards and while the changeover is gathering pace, as of April 2016, most retailers still couldn’t accept them. However, with the EMV liability shift firmly in place, retailers might want to see what they can to do to speed up the move to an EMV terminal.
Why the Need for Chip Cards?
In the countries where chip card technology has been introduced, it has a proven track record of reducing fraud. For instance, after EMV was introduced in Canada, debit card fraud fell by 79 percent. Chip cards are considered more secure as they are harder to copy. Older cards depend on a magnetic strip, which can be skimmed and used by fraudsters.
A further benefit of chip cards is many of them allow contactless payments, which allows more efficient checkout times.
The Slow Switch to EMV Technology
The United States has lagged behind when it comes to introducing chip cards and although the chip card technology has been available in the US for some time, it has been in limited use. Research from the Strawhecker Group, which was released in September 2016, showed that less than half (44 percent) of card-accepting merchants in the US. have EMV terminals, and just 29 percent can accept EMV payments.
Why Has the Changeover Been So Slow?
Further figures regarding EMV adoption indicates that there are five million EMV compliant terminals, yet only 1 million of retailers are ready to accept chip payments, according to CBS News, and there are several suggestions as to why the switchover has been slow to gather pace. These include:
- Some retailers have been concerned over the costs; card readers and POS systems often need to be replaced as part of the changeover.
- Software glitches that have added to the delay in installation.
- Once an EMV compliant system has been installed, there can be a long delay in certification.
- The resources involved and the time it takes to train staff can be a significant drain on a business’s time.
- Other retailers have opted to wait and see how EMV works out long-term.
- Small businesses might not want to make a significant investment into an EMV-compliant system while they can still accept magnetic strip cards.
- At the beginning of the changeover, merchants were less informed about EMV and weren’t fully aware of everything that is involved in implementing a new EMV compliant.
- For others, the main problem was a lack of preparedness.
How to Make the Change More Efficient
Switching over can be a time-consuming process. However, if you are one of the merchants who have yet to make the move, there are several steps you can take to quicken the chip card changeover process:
- Speak to your payment processor so you know what you need to do in advance to changeover. If you have invested in a new terminal in the last few years, establish if it’s an already EMV compliant system, and just needs certifying before it can be switched on.
- Find out about training. The changeover is going to much more efficient if you and your staff have adequate training. There are several organizations that offer this, or ask your payment processor what support and training they have available.
- Before moving over, get a better understanding of the costs. If finances are one of the things holding you back, you might be able upgrade your system for free – ask your merchant services provider if they offer free software upgrades.
- Consider using the changeover as an opportunity to get up-to-date with the latest terminal so you can accept a greater range of payment options. The way consumers pay for items is rapidly changing; many consumers prefer contactless and mobile payments. Ask your payment processor if the new system will be compatible with newer methods of payments like Apple Pay so you’ll be better prepared for the growth in these payments.
- Help to smooth the installation process by speaking to your IT company in advance to discuss what changes you need to make and talk to your payment processor about the options available. Make sure you ask plenty of questions during this stage to help avoid potential delays in installation.
- Speak to your credit card company. Credit card companies are offering support to speed up the pace of moving over. For instance, Visa has introduced a number of measures to help merchants switch over, including streamlining the testing requirements and acquirers can self-certify. Visa is also providing additional resources, such as training and education for merchants who are struggling to make the change over.
Importance of Changing Over
- As noted earlier in the article, the biggest benefit in chip card technology is the reduction in fraud; reports indicate that merchants who do adopt EMV have lower levels of fraud. Research from Visa shows fraudulent transactions fell by 18 percent, while merchants not ready to handle EMV experienced an increase in fraud of 11.4 percent.
- A more secure way of accepting payments could also help consumer confidence. 77 percent of consumers have concerns that their financial details could get compromised so greater security will be of importance to them.
- Another important reason for changing over is the EMV liability shift, which was introduced in October 2015, and in some cases it can make retailers liable for fraudulent payments.
While the U.S government doesn’t require retailers to switch over by law, with millions of cards worldwide being chip enabled, consumers are keen to use chip card readers.
The changeover has been slow to gain pace and not without its challenges, but being ready for chip card payments offers a business many advantages such as improving security for your customers and reducing a merchant’s liability should a transaction be fraudulent.