It started about a year ago in the United States. The transition of millions of credit cards from standard swipe cards with a magnetic strip to a more sophisticated card with an embedded chip inside. The new credit cards were supposed to make everyday transactions safer and more secure, but the story that you may hot have heard is it just isn’t working as expected.
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Are Retailers Justified In Taking Their Time With EMV?
By Glenn Taylor, Associate Editor
Last year’s Oct. 1 EMV liability shift was a major point of concern for retailers in the wake of massive data breaches at Target, Home Depot and Michaels. Many merchants were scrambling to upgrade their POS systems so they could avoid future breaches, or at least move some of the responsibility for them to other parties.
But less than five months after the liability shift went into place, only 22% of retailers currently support EMV payments capabilities, according to research from Boston Retail Partners. Adoption going forward isn’t expected to move at a much quicker pace, with just over half (53%) of retailers planning to implement this capability within 12 months.
With only 38% of retailers actually considering payment/data security as a top business priority, it appears that many aren’t in a real hurry to make a change.
From personal experience, I can say that I’ve visited numerous smaller retailers in the past few months that haven’t updated the technology. Even during briefings with SMBs in the months after the shift, I’ve had retail execs indicate that EMV isn’t an option that has even been given much thought, largely due to a lack of funds, manpower and time available to be dedicated to any potential upgrades.
While the lack of implementation didn’t surprise me, the minimal knowledge some companies seemed to have regarding EMV, even after the deadline passed, made me ponder just how well the technology has been publicized.
There’s also been debate that many of these retailers don’t actually have strong incentives to make the upgrade in the first place. Retailers that sell smaller ticket items, for example, aren’t likely to experience the dramatic breaches that department stores and big box retailers have to fight against. As such, these businesses just haven’t felt that the benefits associated with potential upgrades — which could include POS systems offering greater functionality as well as enhanced security — would be worth the price.
Newer payment terminals can cost within a $500 to $1,000 range, so if the retailer doesn’t feel their business is at risk of fraud equal to those kinds of expenses, then they may feel content with their solutions regardless of how outdated they may be.
While the costs vs. benefits argument is compelling for the coffee shops of the world, the fact remains: in the event of a breach, those retailers will be forced to deal with the financial fallout (not to mention the damage to their reputation), and they won’t have the backing of the card issuer or the bank to reimburse their lost funds. As EMV deployment becomes more commonplace throughout the industry, and gains more publicity among consumers, maybe then the retailers who haven’t considered making the effort yet will take steps to onboard the technology.
As 2016 pushes further into gear, I can only hope that the topic of EMV remains top of mind, especially if fraudsters feel they have to resort to using their old tactics at smaller retailers.
Three Proactive Steps to Close the EMV Awareness Gap
By Mark Bergner, Worldpay
As October 2015 came and went, fraud liability not-so-silently shifted to U.S. business owners whose POS devices are not equipped to accept chip card payments. According to The Strawhecker Group, only 27% of businesses have implemented chip technology and surveys show a wide EMV chip awareness gap among consumers, which means there’s still work to be done.
While business owners take steps to EMV-enable their equipment, they can also take proactive steps to shape their customers’ views on chip cards and improve their in-store payments experience. Consider these three actions.
Educate staff about plans for EMV implementation.
When businesses share what they know and their approaches to transaction security with their staff and customers, they can position themselves as trusted places to shop – and keep customers coming back. For example, business owners can explain how EMV certification requires collaboration across the business, POS vendor, payments gateway, payments processor and card networks. Many retail equipment providers have EMV training materials or YouTube has several pages outlining the process.
Train staff about card acceptance best practices.
To reduce the risk of counterfeit fraud while readying to accept chip card payments, businesses can take the time to train seasonal hires and retrain existing staff on card acceptance best practices, both EMV and beyond. Employers should demonstrate basic card acceptance procedures and provide a refresh on the security features employees should look for when dealing with customer’s payment cards, such as a magnetic strip, signature panel and Card Verification Value or CVV on the back of each card. With proper knowledge of card acceptance procedures, employees can continue to minimize fraud loss before, during and after the business implements EMV.
Anticipate common questions from consumers.
To display their commitment to transaction security and present a united front to consumers, businesses can anticipate common consumer questions and train staff to provide consistent answers. For example, customers might question how to use EMV cards, how they provide a more secure transaction, or if there are any additional fees associated with EMV cards. Businesses can offer training sessions to share the appropriate answers to these and other questions and provide a list of answers for employees to practice using. With an arsenal of informed answers, employees can reassure customers that payment security is their top priority.
For more information on closing the EMV awareness gap, visit Worldpay’s EMV Resource Center at www.emv.worldpay.com.
About the Author
Mark Bergner is Director of Product Strategy at Worldpay, a leading global payments technology and services company that offers services across the entire payments value chain and in any environment: in-store, online and via mobile devices.
Mark Bergner has more than 15 years of experience in payments and merchant services. His team is responsible for the company’s EMV strategy including evaluation and implementation of the new chip card standard.
Prior to Worldpay, Mark was the Head of Global Sales & Strategy, Gateway Division at American Express. While there, he helped launch the small business channel partner initiative and the American Express payment gateway. Prior to joining American Express, he spent three years at Merchant e-Solutions as VP, Channel Partnerships. In that role, he launched e-commerce initiatives focused on growing the strategic partnership program and served as the subject matter expert on platform, gateway and mobile trends.
Mark is regularly sought out for his subject matter expertise on EMV and card-not-present solutions. He has spent the past year educating peers and merchants alike on the new EMV standard, which he views as the biggest paradigm shift in the payments industry since the introduction of debit card payments more than thirty years ago.
Previous positions before Merchants e-Solutions were with Intrix Technology Inc. as VP, Business Development; VeriFone, Inc. as National Sales Executive; and Chase Merchant Services as VP, Strategic Partnerships.
Were Retailers Prepared For The Oct. 1 EMV Deadline?
On October 1, the long-awaited EMV liability shift took effect nationwide, putting full financial responsibility on all retailers to meet industry payment technology standards. Businesses that have not yet made the upgrade to EMV-enabled payments systems now risk having to pay large expenses in the event of a security breach.
Leading up to the deadline, many retailers questioned the benefits of investing time and money into ensuring EMV compliance. With that in mind, the question remains: Are these retailers taking too much of a risk?
Below, the RTP editorial staff shares its perspectives on the deadline, and whether retailers and financial institutions alike have made the necessary preparations for it.
Debbie Hauss, Editor-In-Chief: The retail industry has been anticipating the EMV deadline for some time now, but many industry executives still need some education on the topic, including related technologies and long-term ramifications. Based on discussions with many industry experts over the past few years, I think the largest retailers with the highest average purchase amounts are at the greatest risk and should be sure to enable all stores with EMV capabilities as soon as possible. The smallest retailers, and those with low average purchase amounts, are at the least risk and may not need to rush into EMV enablement.
Alicia Fiorletta, Content Strategist: What I find really interesting is the significant gap between our coverage of EMV and how retailers and financial institutions are keeping pace. It feels like we've been covering payment technology and data breaches for years, and yet retailers and banks still don't seem to have a sense of urgency. I still haven't received updated credit cards from all companies, and I was just at a J. Crew, and the associate was saying that their technology was going to be updated within a few weeks. Hopefully progress will continue and there won't be any breaches or security issues as we head into the holiday season.
Rob Fee, Managing Editor: It does not seem to me that anyone in the U.S. was ready for EMV on October 1. I made a few shopping trips in the days following the deadline, and not one cashier blinked when I swiped my card rather than inserted it into a chip reader. Many shoppers, myself included, are still waiting for new cards from their banks and credit card providers, and plenty of retailers have not complied with the deadline. There are even questions concerning the value of the spend associated with upgrading POS terminals. After all, retailers with a few stores do not have same exposure to risk as big box stores. I expect that although EMV payments eventually will become standard practice, it won't (and didn't) happen overnight.
Adam Blair, Executive Editor: With any change as complex and far-reaching as the transition to EMV, it's inevitable that there will be controversies over which party has done enough to prepare. Certainly financial institutions bear a large part of the responsibility for slow distribution of EMV chip cards to U.S. consumers. For retailers, particularly those that have not yet invested in EMV-capable POS technology, they now need to calculate their potential fraud losses against very real costs for upgrading their systems. One thing to keep in mind is that criminals always seek out the easiest, least protected targets. Therefore, as EMV acceptance accelerates throughout the retail and hospitality industries, it will pay for businesses to make sure they are not among the last ones to hop on the more secure EMV bandwagon.
Glenn Taylor, Associate Editor: While the October 1 liability shift deadline has been common knowledge in the retail industry for far longer than a year now, I think retailers should have been given a longer time to fulfill the EMV quota. Smaller businesses, in particular, will be heavily affected by this, especially with some terminals ranging up to $1000. While a big box retailer should have less of a problem taking that hit for an upgrade, SMBs aren't always as fortunate given their budgets. In addition, with Visa reportedly enabling only 18% of its cards with the EMV chip as of July, the entire operation from the retail and financial sides has felt less thought out and more rushed.
Kim Zimmerman, Managing Editor, Demand Gen Report: I've shopped a few times at Target recently and had to use the new technology. It doesn't seem as if the cashiers have been trained on how to use it or explain it to customers. It seemed a bit slow and clunky, and with so much advance notice I would have thought the big box retailers would have had a better handle on it.
For the Brooklyn Book Festival this weekend, Papercutz will be in different locations on Saturday and Sunday, and that means other publishers will too. In yesterday's post, the Metro Tech location is for SATURDAY ONLY, and Papercutz will be at booth #3. Most Children's Day activities will be going on in the Metro Tech Commons. Sunday, the main day of the Festival, Papercutz will move outdoors to Booth 308, near the court house, and here's the map. It'll be beautiful weather this weekend, so hope to see you there!
If you're an indie artist or own a small business and accept credit payments, listen up: you need to be ready for the "Liability Shift" in 2 weeks. Basically, credit cards are moving towards having tiny chips inside them instead of the magnetic strip, which will apparently be more secure. If you have a Square card reader, you have to buy a $49 new reader to accept credit payments. If you don't, and you swipe a fraudulent card, YOU'LL be responsible for the lost charges, NOT the banks. It looks like getting the new reader is the way to go because it will protect everyone more. Granted, Square said they'll reimburse for the reader up to $49 in their fee credits after you use it for 3 months. However, their fees are very small, and I don't use the reader that much. I use it once a month for comic conventions, but actually most people pay in cash. I'm glad to have the Square reader though, because it does help like 20% of the time. But no way will I charge enough people to make up the $49 in small fees over 3 months, and will probably still end up paying around $45. So even though I pre-ordered the new chip Square reader, I feel forced into it.
This brings to mind that the way technology is going, we artists have to keep buying more and more expensive tech tools just to keep up. Adobe's new payment system has me and others locked into paying $50/month for the programs we need, and they have a monopoly because they're the industry standard. My Mac is pushing 5 years old, and is running terribly show. I fear the day it will konk out completely, because I can't afford a new one. This has already happened to some of my artist friends, and it's like a catch 22 - they can't afford a new computer or the programs they need, so then they can't get new jobs in their field. And because they can't get those jobs, they can't make more money to buy new upgrades. This is something that seriously scares me and I don't know the solution to it.
Thanks for listening to my little rant :P But it's the weekend - everything is better on the weekend!
Anya is live and ready to show you everything. Watch her strip, dance, and perform exclusive shows just for you. Interact in real-time and make your fantasies come true.
✓ Live Streaming✓ Interactive Chat✓ Private Shows✓ HD Quality✓ Free Actions
Free to watch • No registration required • HD streaming
The EMV Migration affects everyone, even card-not-present merchants. Find out what the liability shift means for CNP merchants and what your business needs to do. http://hubs.ly/y0ZfNW0
