Understanding Electronic Payments: Post-EMV Follow-up

Change can be challenging, and especially so when it requires an entire industry to shift its behavior. This has been the case for the retail sector with the new EMV requirement and its October 1 liability shift date. Now, 45 days since its implementation, let’s review how it is impacting retailers and customers alike. What key challenges have they encountered along this journey to EMV compliance?

  • Some software vendors have not been EMV-ready or experienced outages that have resulted in some retailers not being able to process EMV transactions. A few of these outages, which occurred right around the conversion date, have also caused duplicate credit and debit card charges, as well as lost sales for retailers.
  • Delayed EMV equipment availability as a result of a backlog from retailers procrastinating in making the switch has now placed them at risk of being charged for non-EMV compliance by some card acquirers. Following this development, the National Grocers Association (NGA) has urged Visa & MasterCard to guarantee that grocers will not face liability issues because of slowdowns in implementing EMV technologies. Whether the liability shift is delayed, however, remains to be seen.

  • Periodic credit card billings have and could continue to experience hiccups. This happened with Netflix customers who, because the new EMV chip cards contained new card numbers, were required to update their subscriptions. Those who didn’t ahead of the following billing cycle may have incurred a chargeback, resulting in Netflix removing them as customers.
  • Customer confusion is common at check-out, since the terminal set-up for EMV is not standard. Some terminals require the chip (EMV) card to be inserted into the EMV terminal if it’s recognized as chip card when initially swiped by the customer, while other retailers/terminals do not.
  • Overall check-out delays are pervasive, as the EMV card must remain in the terminal for up to 20 seconds, which is far more time-consuming than the quick swipe of a read-only magstripe card. One big box retailer commented that when their customers remove their EMV cards from the terminals too soon, registers crash, forcing cashiers to re-do the transaction at another register. To minimize the delay, an increasing number of retailers are considering accepting mobile wallet payments, since these transactions can be completed as quickly as the previous magstripe cards and with EMV-like security.

Ultimately, this is a very significant and costly transition for retailers and their software providers  —  and it’s being implemented right before many retailers’ busiest season. And while challenges are likely, it is important to remember that the drive behind this change is to protect consumers and YOU from fraud at the storefront.