EMV continues to pick up steam over security fears, regular use

Category: Merchant Processing Industry

Since the EMV liability shift went into effect late last year, the migration of everyday card use has slowly but surely been toward the new payment option. However, there are now some signs that such a move could be picking up a little steam among many shoppers, and it may be wise for merchants to follow suit as soon as possible.

The latest data from the start of the holiday season shows that 55 percent of all in-person debit and credit card payments made on Black Friday this year were completed with an EMV-enabled card, up from just 0.2 percent on the same day in 2015, according to Cayan LLC. That increase came entirely at the expense of magnetic stripe purchases, which slipped to slightly more than 1 in 3 purchases from the previous year's 88 percent.

EMV is catching on with consumers as magnetic stripe threats linger.EMV is catching on with consumers as magnetic stripe threats linger.

A closer look
Consumers are getting more accustomed to using EMV cards in their everyday lives, which spells good news for the payments ecosystem as a whole. This is also true of the growing adoption of mobile payments nationwide, which accounted for a mere 0.6 percent of all Black Friday purchases, the report said. Interestingly, though, that number was double from the share of the market seen last year.

The state most likely to use EMV cards was Maryland, where 68 percent of all purchases were completed with this payment type, the report said. That compares favorably to South Dakota, which placed last in the U.S. at just 26 percent EMV payment rate. Meanwhile, California had the most mobile payments, with 1 percent of transactions using this platform. Wyoming took up the rear in this regard, with just 1 in every 200 payments made using a mobile platform.

What's the benefit?
Meanwhile, the increased security provided by EMV and mobile payments is becoming more of a focus for the merchant industry as a whole, according to Digital Transactions. In late November, Madison Square Garden announced that it had uncovered a data breach stretching back about a year for all customers who used their cards to make purchases at one of its five properties. The company did not say how many people were affected, but the number is likely in the six digits, with details such as cardholder names, card numbers, expiration dates and even verification codes potentially having been exposed.

As a consequence of breaches similar to this one, the Federal Reserve Banks of Boston and Atlanta recently recommended that card issuers stop sending out EMV-enabled cards with magnetic stripes as "backup," the report said. That could go a long way toward helping to dissuade people from using the less secure, decades-old technology when they have the newer and safer option available to them.

The more merchants can do to encourage such a transition in the near future, the more likely they will be to avoid such a data breach themselves, and in doing so will also help to secure the payments ecosystem for cardholders and payment processors alike.