Europay, MasterCard and Visa (EMV) credit cards are a 20-year-old technology that has become the standard payment option in most retail markets around the world. Because each card comes equipped with a “non-clonable” chip, EMVs are more secure than their traditional magnetic swipe & sign counterparts.
Despite these advanced security features, EMV chip-enabled cards are almost nonexistent in the United States.
But this trend is changing rapidly.
As new liability rules go into effect in 2015, U.S. merchants and credit card issuers are scrambling to update their payment systems. With these liability rules in place, whichever side of a given transaction that isn't EMV-ready will be responsible for any fraudulent losses.
How Quickly Will EMV Technology Become Universal in the U.S.?
Chase was the first major bank in the U.S. to begin offering chip & PIN EMV credit cards to its customers. But the rate of adoption has begun picking up speed as other credit card issuers send out their own EMV-enabled plastic.
According to Aite Group, EMV penetration could reach 25 percent by the end of 2014 (in addition to 8 percent penetration for EMV debit cards). To put that in perspective, this represents nearly 200 million new cards in circulation that didn’t exist before.
Although full adoption probably won’t happen until 2018, the above numbers are still impressive. Especially when you consider that hardware updates could cost U.S. retailers $2.6 billion as they replace traditional credit card readers with EMV-ready terminals.
The rate of adoption might even be higher if smaller retailers follow in the footsteps of Sam’s Club and Wal-Mart – major chains that have already begun offering EMV credit cards to their own customers.
What Does 25 percent EMV Penetration Mean for You and Your Retail Store?
Becoming EMV-compliant isn’t free. As mentioned before, you must update your hardware. In addition, you also need to train your staff how to begin accepting EMV credit cards in the store.
But if you’ve been holding off making the transition for financial reasons, consider the following:
- By 2015, you won’t really have a choice. Failure to become EMV-ready will expose you to higher risks as would-be thieves exploit your security gaps.
- By the end of 2014, 25 percent of your customers will have EMV credit cards in their pockets. Why shop at your “less secure” store when other competitors can offer greater protection against hackers?
In other words, it doesn’t make sense to wait. For merchants who haven’t updated their payment technology:
- Fraudulent losses will likely increase
- Potential sales will probably decrease
The sooner you make the transition, the better off you’ll be. If you need help updating your payment infrastructure, use the free resources below:
For all other questions or inquiries, please contact our customer support team for a free consultation.