EMV technology has continued being introduced in the United States as a way to help prevent card-present fraud and to give consumers even more convenient and secure ways to pay for their goods and services. It is extremely important to develop an understanding of EMV and the potential impact that it may have on your business.
Here are the 5 key factors that are impacting the migration to EMV:
1. Merchant Preparedness:
The main reason why merchants are still not accepting chip cards is because they do not know about EMV or what it entails. Visa and Mastercard have been working to educate merchants and prepare them for the liability shift, but that is only one piece of the puzzle. There are instances where the merchant is aware of EMV, but may see the potential consequences as a small risk. This is due to media coverage surrounding EMV that has a negative impact on their opinions. Merchants who are processing a small number of credit and debit transactions fear the cost associated with upgrading to EMV.
2. Consumer Preparedness
New cards and technologies mean that consumers will have to change the way they are accustomed to paying. Consumers need time adjusting their payment behavior for the transition to run smoothly. Once cardholders are familiar with the higher-level details, they can turn chip payments into habit. Beyond the consumer learning about the basics of EMV, employees of businesses play a critical role in chip card adoption. Employees who work in industries where they handle payments will need to be shown how to guide customers through the EMV process. Businesses need to make it clear that they accept EMV payment.
The key is getting customers to turn chip payments into a habit, which ultimately will lead to better security and EMV practices down the road for both consumers and merchants. Persistence is the best way to transition customers towards healthier payment habits. The U.S. credit and debit cards for many years have had magnetic stripes that contain all the financial information required to make a purchase. Now that securitity risks are becoming more and more visible, payments needed to change accordingly. Once customers become aware of the security risks involved, they can turn chip payments into a habit.
4. Cardholder Perceptions
Of people who marked their chip experience as dissatisfying, majority highlighted that the speed of transactions was the most frustrating element. The general rule of thumb with technology is that newer equates to faster. This is not the case with chip cards because more data is being transferred back and forth. The best way to combat this is through optimizing transaction speed at the terminal by migrating network communications to IP-based. Beyond IP-based networks, the Quick Chip initiative is a software update available. The biggest positive about Quick Chip is that it retains the data when it requests an authorization, also known as an Authorization Request Cryptogram. It can be implemented into preexisting equipment and card processors.
The majority of chip cardholder’s education regarding EMV was through printed materials sent with new cards. According to Javalin, 47% of EMV cardholders reported that printed materials from their bank were how they became aware of EMV but the report also concluded that, “Incidentally the least effective channel for cardholder education was printed material.” This is why it is crucial for merchants to act as educators for their customers. In order to successfully get customers on board, merchants need to understand EMV technology and be able to communicate to cardholders making purchases at their storefronts.
Over time, merchants and customers will become more seasoned with EMV practices. More merchants will become educated on EMV and consumers will become accustomed to dipping their cards instead of swiping them. The shift to EMV has proven to be hard work, as consumers and merchants alike adjust their behaviors to better suit chip and dip practices. While there has been a great deal of effort, the reward is well worth the added education.