A new survey from The Strawhecker Group (TSG), the Omaha-based global payments consulting company, estimates that 37% of U.S. merchant locations are EMV-ready four months after the October 1 liability shift began. That percentage is below the September expectation suggested by TSG's last survey of payment processors and providers, which estimated that 40% of merchants would be EMV-ready now.
A holiday delay?
"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 Drierling, business intelligence manager at TSG. Drierling added, "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."
Three hurdles to EMV implementation
TSG found that the three biggest hurdles slowing EMV implementation are:
- Payment processor readiness
- Gateway readiness
- Technical staff resource availability
What should you be doing to accept credit cards securely?
If your business hasn't begun to accept EMV chip cards or hasn't even begun to think about EMV, the survey findings and hurdles above suggest a few things that you as a small business need to do:
- Assess the likely impact of the EMV fraud liability shift on your business (do that in conjunction with your advisors, including merchant processing account providers etc.)
- Understand your own readiness for EMV chip-card acceptance, i.e. do you have the right terminals or POS devices to accept EMV cards
- Understand your payment gateway and/or processors readiness to process EMV card transactions
According to a release from TSG, by June 2016 it's estimated that consumers will be able to use their EMV credit and debit cards at 50% of U.S. merchant locations. EMV-readiness is not expected to reach a threshold of at least 90 percent of merchant locations until 2017—more than 15 months after the shift. EMV (an acronym for Europay, MasterCard, and Visa) is a globally-accepted card standard that uses an embedded microchip to provider unique data protection when the card is inserted into a chip-card reader. Following the liability shift in October 2015, U.S. card-accepting merchants without the ability to accept EMV cards may be liable for fraudulent transactions made at their locations.
TSG's sample included 92 payment service providers that service more than 3.9 million merchants, or approximately 50% of the U.S. card-accepting market. In the most recent survey, nearly 40% of respondents felt that media coverage had a negative impact on their EMV implementation efforts. One survey respondent said about coverage, "(it) confused the merchants more than it helped," while another added "it was a Y2K kind of scare thing: the world is going to end if you don't care of EMV."
Truth is, not accepting EMV chip-cards does leave your business liable for certain fraud transactions as of now. So understand the facts about EMV and its application to your business.