Despite an October 1 deadline that changed fraud liability requirements for companies that accept credit cards in the United States, the EMV format isn’t everywhere yet. Here’s how some groups are encouraging its adoption.
About a month or two ago, the news was hard to ignore in the business and financial space: The financial industry, smarting from skimmers and fraud, is moving to chip cards (also known as EMV-compliant cards), while the retail industry is trying to make the change as painless as possible.
There was a lot of buildup ahead of the widely reported October 1 deadline in which fraud liability for traditional swipe cards shifted to retailers. And then … things got pretty quiet again. Ten to one (unless you’re like me and recently took a two-week European vacation), you probably haven’t run into many retailers forcing you to use EMV-compliant cards quite yet.
“Many banks and retailers not only missed the October 1 date without breaking a sweat, they show little sense of urgency about getting the new chip cards in consumers’ hands and making them usable in stores and restaurants,” wrote Penny Crosman, American Banker‘s editor at large.
So what’s causing things to slow down? Among some of the key challenges facing long-term adoption of chip cards:
Winning over consumers: While banks can ship new cards to consumers and retailers can ensure the cards get used, consumers are ultimately on the hook to use them in the desired way. That means groups such as the Smart Card Alliance now have to focus on consumer education and advocacy efforts to ensure the future of chip cards. To that end, the EMV Migration Forum has taken steps to educate consumers and the media, creating videos (such as the one above) and launching a detailed press room that explains why the chip cards were introduced and how to use them.
Making room for tips: The trend these days may involve dropping tips entirely, but many restaurants still accept them, and EMV threatens to make tipping with a debit or credit card a lot harder. The EMV Migration Forum recently released a white paper outlining ways that tips can be included in an EMV environment. Heartland Payment Systems has also addressed this issue, providing a webinar about the issue to the National Restaurant Association.
Debates over the details: One of the defining challenges of the move to EMV prior to the October 1 deadline was a debate over chip-and-signature usage, which the banking industry had encouraged instead of PIN codes that are used in European countries. Consumer and retail groups, such as the American Consumer Institute Center for Citizen Research, continue to disagree with the decision to rely on signatures rather than PIN codes, while financial firms such as Mastercard emphasize that the chip alone boosts security significantly. “Right now, the biggest problem in the U.S. is counterfeit fraud,” a company spokesperson told Business Travel News. “[Lost and stolen card fraud] is a concern—we don’t want any fraud in the system—but it’s not as big of a problem. Getting the U.S. economy to chip was the first priority.”
Outside momentum: Unlike the launch of EMV in Europe, the United States is grappling with a number of competing technologies that could challenge EMV in the long run. In a recent Computerworld op-ed, contributor Ira Brodsky notes that when U.S. retailers upgrade payment systems, odds are that they’ll purchase something that also supports mobile payments. “Security-wise, smartphones can do everything smart cards can do and more. Smartphone users increasingly demand self-service options for accessing product information, receiving notifications and special offers, and paying,” Brodsky writes. “And brick-and-mortar merchants have discovered that they can deliver superior shopping experiences to smartphone users through personalization and contextual engagement.”