“EMV—which stands for Europay, MasterCard and Visa—is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud,” according to creditcards.com.
Also known as “smart cards,” EMV chip cards are starting to make inroads with consumers and retailers. Thus far, 670,000 retailers have the ability to make chip card transactions; 60% of consumers had a chip card as of the end of October 2015; and by year-end 2015, 25% of debit cards were to have been issued as EMV cards.
Still, there is more to be done to help consumers and retailers adjust to the new payment technology.
Some FAQs, according to the article, include:
Research findings this week indicate there are various consumer concerns and that perhaps, some patience will be required as the technology continues to gain traction.
Read on and consider what you can do to help ease consumer transition into this evolving payment method.
‘The readiness is all.’–Shakespeare
“With minimal understanding of EMV by consumers and store associates, retailers are going to face two key challenges when implementing EMV in their stores,” reports Boston Retail Partners.
The first challenge will be training store employees about how EMV works, what it is, and why it is coming into play.
The second challenge is how retailers will inform customers about the new payment technology.
For customers, the biggest change happens during checkout: Swiping will no longer be part of the process as customers will instead “dip” cards into EMV-capable payment devices.
“This seemingly minor change cannot be overlooked or minimized as swiping has been the norm for so long and has become a subconscious behavior during checkout,” the article notes.
Further, transactions take five to 10 seconds longer; there is a chance transactions will not be completed as customers remove cards from readers prematurely; and there is risk cards might be forgotten in the terminals.
One last complication is that “there is the open question of chip or PIN entry for a given EMV card. Many customers may not even be aware of their PIN for nondebit cards, which will further slow down and complicate the checkout process.”
“Special attention must be spent towards developing robust change management plans which include both associate training and consumer education,” the article concludes.
Transaction time is important to consumers, as results of a recent Harbortouch survey show. “One in five consumers consider transaction time as their top concern when using an EMV-enabled credit or debit card.”
Further, almost 44% of consumers would consider making purchases in line rather than waiting at a checkout counter if it lessened wait time.
“Capitalizing on emerging ‘line busting’ or in-line checkout options, similar to those used by Apple in its retail stores, could help big-box stores and other merchants improve the shopping experience.”
Thirty-three percent of survey participants did not know about options to buy products while in line. This option might help retailers circumvent some payment issues.
Lastly, the article notes that ”Speed trumps security” and almost four times as many survey participants have greater concern about quick processing time than security.
‘You can’t always expect a certain result, but you can expect to do your best.’ --Anita Hill, lawyer and academic
Fraud, however, remains an important concern and potential exists for some types of fraud to escalate as EMV cards gain prevalence.
“Online Retail Fraud to Increase 106%--Are You Ready?” asks Boston Retail Partners. EMV cards will facilitate growth in online fraud. As retailers gain tighter hold on in-store security issues, cons will reposition tactics to e-commerce venues.
Online purchases do not require presence of a card and thus, “there is no way to verify the card’s legitimacy by verifying the signature, checking the customer’s ID or matching the last four digits of the card.”
Therefore, retailers need to “implement a rules-based fraud detection tool, auditing suspect transactions and authorizing legitimate ones.”
Some things to do include encryption of all data, and being cognizant of the amount of data retained. “The amount of credit card data retailers must save to offer this convenience makes it a target for hackers.”
Another potential area for fraud is found via email, according to an article at Forbes.
Some fraudsters will contact consumers by email, “posing as their credit card company informing them that in order to issue a new EMV chip card, they need them to either update their account by confirming some personal information or click on a link to continue the process.”
Both options are bad. It is never a good idea to provide personal data, and clicking on links may install malware that steals personal information from the computer.
What do consumers want in the way of fraud protection on EMV cards? PINs, according to Digital Transactions.
First Niagara Financial Group Inc. determined after testing EMV cards with PINs on a group of 50 employees that, despite bank employee biases surrounding payments, “most transactions went quickly and smoothly, and there were enough merchant locations already live with EMV terminals that the bank concluded it could go ahead and roll out chip-and-PIN to its customer base.”
The advantage of requiring a PIN is that the additional security measure will halt lost and stolen card fraud.
Requiring a PIN will further alter the consumer experience, but First Niagara thinks people will adjust as have citizens in Canada and Europe where chip-and-PIN is more prevalent.
‘Success comes from preparation.’ --E’yen A. Gardner, inspirational writer
Regardless of whether consumers embrace EMV cards, the technology grows, reports prnewsire.com.
In the U.S., the issuing of EMV cards surpassed industry estimates at almost 600 million units. China, too, successfully issued a record number of cards approaching 850 million.
“The two countries led significant worldwide market growth, accounting for 53% of the more than 2.6 billion total EMV cards shipped in 2015,” the article notes.
Market penetration in the U.S. is expected to reach 100% over the next two years, and with this, a dip in the U.S. market is anticipated.
“U.S. EMV shipments will peak in 2016 and reach approximately 617 million units. In 2017, shipments are forecast to dip by approximately 5% with later shipments likely to settle within the 600 and 615 million range.”
How can you help members gain awareness and understanding of new payment technologies?