So, how’s that EMV (Europay, MasterCard, Visa) rollout going? The answer probably depends on who you ask.
The holiday shopping season never brought the point-of-sale meltdown some feared. When asked to grade the rollout, payments practitioners at banks, card networks, and independent sales organizations usually answer with either a “B” or a more guarded “incomplete.”
Slowly but surely, consumers are using EMV cards, but their point-of-sale experiences haven’t been uniform. And with well more than half of card transactions still being processed via legacy magnetic stripe, this transition may continue for some time.
Some consumers grumble about EMV transactions taking too long. Of course, few consumers know the term “EMV.” Instead they refer to chip card transactions and perhaps the dip versus swipe process.
On one level, this complaint has a factual basis. A tokenized EMV transaction involves the transmission of larger packets of encrypted data, as well as a greater number of round trips between terminal and card network.
This tradeoff should be an easily communicated no-brainer given the enhanced consumer security, because in theory it accounts for an imperceptible fraction of a second of additional processing time.
However, that fraction of a second difference holds only if a terminal is properly tuned—and that’s a big if. Reported processing times of 15 seconds are enough to cause dissatisfaction, and are almost certainly the result of substandard implementations.
That raises the issue of EMV certification backlogs that have become an increasing issue with retailers. Presumably these tests focus more on security and accuracy than efficiency, and may have further tilted that balance to help alleviate the backlog.
In reality, more mundane factors are probably driving consumer perception of a slower payment experience.
First there’s muscle memory: consumers have been conditioned for so many years to swiping the magnetic stripe, a change in routine will inevitably cause a moment of hesitation and a temporary slowdown in the process.
Try wearing your watch on the other wrist for a week and see what I mean.
More importantly, with the legacy “swipe” routine consumers can put their cards back in their wallets and continue to go about their business. With EMV’s “dip” ergonomics, consumers are put on hold as they wait for the all-clear to remove their card from the slot.
This heightened awareness undoubtedly adds to the perception that the transaction is taking longer. As we’ve learned, perception can be as important as reality.
Card associations have announced initiatives to trim the elapsed time of an EMV transaction. If feasible, the perception benefits of this gain would likely trump any actual processing time reductions.
Once we clear these real or imagined response time hurdles, other challenges are queued up behind them. More than one credit union has told me a subset of its members refuses to activate their chip cards, because they’re convinced it’s a tracking device.
Some perception issues are easier to overcome than others.