EMV, also known as chip-enabled credit and debit cards, are continuing to gain momentum in 2017 among card users and merchants. Despite the responsibility placed on merchants to adopt EMV-compliant solutions since October 2015, not every merchant has complied. Visa has continued to push the date back for complete compliance to give businesses more of a chance to make the changeover. This includes three more years for gas stations to change over their card terminals, giving them until 2020.
What's the Delay?
As other parts of the world have gained speed in adapting to EMV, the U.S. plods along with its own migration to the new transaction technology due to the extra seconds it takes to process each EMV transaction. Some have calculated that each EMV transaction can take between 10 and 15 seconds. While that doesn't seem very long, it can be given a long checkout line and customers with high expectations for a great (fast) checkout experience.
However, technology has responded in the form of what's being called 'quick chip' technology designed to speed up these transactions to alleviate the irritation felt by merchants and consumers alike at checkout. A quick chip EMV transaction only takes 2.5 seconds to complete, which is approximately what a swiped transaction takes. Now, each of the major credit card brands, including Visa, Mastercard, American Express and Discover, offer a quick chip, or M/Chip, EMV card.
For those that do have EMV terminals already, a software update helps to fix the speed issue, while those that do not have an EMV terminal may feel more inclined to make the switch now.
However, some markets have more challenges and unique needs than others. For example, the hospitality and gas station industry struggle more with migration due to the systems they use for payment, including the pay-at-the-pump model for gas stations.
Others have noted that adoption has been slower than expected because of the need to have each system certified by a qualified person who can validate that the system has been installed correctly and is being used within the compliance guidelines.
Positive EMV Adoption Growth
While summer figures have yet to be released, the U.S. Payments Forum did offer a spring 2017 market snapshot that signals continued progress that should continue throughout the summer and the rest of 2017. It referenced The Strawhecker Group, which indicated that 52% of merchants today are enabled to accept chip payments, 36% have contactless-capable terminals, and 28% of those contactless-capable terminals are activated to accept contactless cards. Additionally, Glenbrook Partners reported that 63% of all cards are chip cards within the U.S.
Just Visa's release of its research is reflective of growth in EMV across all card brands within the U.S. In terms of consumers, Visa has issued just under 400 million chip cards in the U.S., which is approximately 47% of Visa’s total U.S. cards. In terms of merchants, Visa reported that 1.75 million of its merchants now accept chip cards, which only accounts for 38% of physical store locations in the U.S.
Additionally, the U.S. Payments Forum estimated that 9 out of 10 Americans are regularly using chip cards at the approximately one-third of U.S. merchant locations enabled to accept chip payments.
Continued Education and Awareness Needed
Organizations like the U.S. Payments Forum have produced white papers and significant content about EMV, its benefits, and how to adopt it because of the realization that continued education and awareness can help influence further adoption of EMV by both merchants and consumers. The organization has also produced research about fraud, illustrating why it is beneficial to migrate to EMV to avoid these vulnerabilities.
For example, in focusing on the benefits of EMV in combatting fraud, it's important to get more quantitative research out there like this information from Visa that found merchants that accept EMV cards have seen their counterfeit fraud losses decrease 58% as of December 2016 and compared to December 2015.
Visa and some of the other card brands have issued research and educational content, including newsletters and fact sheets, to educate merchants, business owners, and consumers about the benefits, emergence of the faster chip technology and other advantages to speed the migration to EMV.
Here to Stay
While it may be taking longer than anticipated, everyone can agree that EMV is not going away. If anything, more compliance and regulations are being enacted to ensure highly secure in-store and online payments. Even with the introduction of other types of payment acceptance technology, including digital wallets, ACH and e-checks, and digital currency like Bitcoin, consumers and businesses will still use their debit and credit cards. As long as they do, EMV will be the standard that retailers and businesses will have to eventually conform to if they want to conduct transactions with customers.