The EMV Transition: One Year LaterMiCamp Solutions
It has been a year since the EMV fraud liability shift on October 1, 2015, but the EMV transition is far from over. The shift to chip payments has been an adjustment, and an investment, for all players in the payment industry.
About 80 percent of consumers now have chip cards, but are discovering that they’re not able to use them everywhere just yet. Currently, about a third of payment terminals are ready to accept EMV, and “based on adoption rates in other countries, Visa expects 90% merchant acceptance in the U.S. in four to five years.” Many merchants have invested in upgraded payment terminals, but are stuck waiting in line for EMV certification.
Liz Garner, Vice President at Merchant Advisory Group states: “There is still a lot of frustration by merchants, and the reality is we’re not as far as we should be. I think, in the U.S., we had a very unrealistic timeline to start with. Four years was a really tall order and not one the industry was ever really ready to meet in the first place. The challenge for U.S. merchants facing those kinds of time constraints is that there were a lot of stakeholders upstream that were not, for a variety of reasons, able to get us a lot of what we need, like technical specifications, to be ready to roll by 10/1/2015.”
Merchant response to the EMV transition has been less than enthusiastic, with some merchants taking legal action against the major card brands. The slow certification process has resulted in an increase in chargeback costs for some merchants, as they are now financially liable for fraud in their environment if they are not able to accept EMV payments.
Merchants and consumers alike have experienced frustration with EMV due to slower processing times. Major card brands like Visa and Mastercard have addressed this issue by creating quick EMV programs, and checkout times will continue to speed up as both merchants and consumers grow accustomed to the new process.
Mastercard reports that fraud rates have decreased by 54 percent for merchants that have implemented EMV. This is encouraging news, and as more payments are processed using EMV technology, fraud at the point-of-sale will continue to decline. This reduction in fraud is due to the extra layer of security that EMV cards provide – they use a unique code produced by the chip to authenticate every transaction. Magnetic stripe cards use the same data for every transaction, making them much more useful for criminals.
However, it’s important for merchants to remember that EMV alone is not enough to prevent a devastating data breach. Merchants should also protect their data with end-to-end encryption and tokenization – ensuring that they are not processing, transmitting, or storing sensitive payment information in their environment.
EMV certification doesn’t have to be hard – contact MiCamp today to learn more about how our MiPoint solution can work seamlessly with your existing payment setup.