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U.S. EMV® Adoption Rate Not Meeting Expectations

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New survey results from The Strawhecker Group (TSG) estimate that only 37 percent of U.S. merchant locations are EMV-ready just months after the October 2015 liability shift. Despite concerted, industry-wide efforts, it appears that many businesses are just not getting the message.

For the uninitiated, EMV is a globally-accepted standard that replaces a payment card’s magnetic stripe with an embedded secure microchip that provides unique data protection when it is inserted into a compatible reader. The U.S. is one of the latest countries to switch to chip cards (also known as smartcards), which have been the standard in other countries for many years.

The TSG survey, conducted in January 2016, reveals that the three biggest hurdles slowing EMV implementation are payment processor readiness, gateway readiness and technical staff resource availability. It also appears that the extensive media coverage about the liability shift may have had an unintended negative impact on the process. One survey respondent complained that “(it) confused the merchants more than it helped”, while another said, “It was a Y2K kind of scare thing; the world is going to end if you don’t take care of EMV.”

There were other reasons why merchants were slow to get onboard, too. “It appeared that some merchants delayed EMV migration completely until the holiday season ended to prevent friction and confusion at the checkout line,” said Jared Drieling, Business Intelligence Manager at TSG, in a prepared statement. “I suspect that many merchants that have delayed, especially merchants in higher risk categories, felt the impact of the liability shift last year and we’ll see them aggressively ramp up plans to migrate.”

An earlier TSG survey of payment processors and other payment providers completed last September estimated that over 40 percent of businesses would be EMV compliant by now. TSG now predicts that consumers will be able to use their EMV credit and debit cards at 50 percent of U.S. merchant locations by June of this year. It also says that it doesn’t expect EMV readiness to reach a threshold 90 percent of merchant locations until 2017, more than 15 months after the liability shift.

It’s important that merchants in the U.S. understand the consequences of delaying EMV migration. Since October 1, 2015, card-accepting merchants may be held financially responsible for fraudulent transactions if they are unable to process chip cards. Prior to that date, the card-issuing bank was liable.

If you haven’t already completed the transition to EMV, now’s the time to do so. The incidence of card-present fraud from counterfeiting and stolen cards has been drastically reduced in countries that use more secure EMV technology; in fact, much of that fraud has shifted to the U.S., which now accounts for almost half of all gross card fraud losses globally while generating about one-fifth of the total volume. Transitioning to EMV also addresses the growing international card payment acceptance incompatibility between traditional magnetic stripe cards and the widespread EMV acceptance in other countries.

Talk to a TransFirst® representative today about making the switch to chip card processing. We offer the products and services you need to make the transition as seamless as possible.

EMV is a registered trademark or trademark of EMVCO LLC in the United States and other countries. www.emvco.com.

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