Why are some merchants still behind on adopting EMV?

Category: Merchant Processing Industry

Recent data suggests that the number of businesses across the country that are now either capable of accepting chip-and-PIN credit and debit card transactions, or in the process of getting certified, continues to grow. However, that certainly doesn't mean all retailers have taken this step yet, and as a consequence some shopping excursions might result in consumers having to use different types of payments instead of just relying on EMV.

There may be many reasons why retailers haven't at least started the EMV certification process yet, according to a report from Minneapolis television station WCCO. Some of that may have to do with the cost of the equipment necessary to handle such transactions being greater than some of the nation's smallest businesses might be able to afford at this time (and certainly, they are not yet required to be compliant with EMV standards at this point), while others have cited worries about consumers' frustrations with the slightly slower payment process EMV still provides.

More merchants are moving to EMV, but there are still some holdouts.More merchants are moving to EMV, but there are still some holdouts.

Other hurdles to clear
Meanwhile, though, part of the reason that some stores still haven't started accepting EMV technology is because the certification bottleneck is still fairly backed up, the report said. That's due in part to the fact that many adopters didn't try to get certified until right before the initial EMV liability shift, meaning that if they'd started the process a few months earlier, the payment processing companies probably wouldn't have had as much trouble getting everyone approved. As a consequence, those that tried to get into the process after the liability shift went into effect only got in a longer line than they might have expected.

Lingering issues
Indeed, there are many stores that have moved to adopt EMV but haven't been able to yet, to the point that only about 1 in 5 EMV-enabled card-reading devices in the U.S. are actually operating with full functionality, according to a report from Slate. The good news is that Visa, MasterCard, and American Express have all undertaken efforts to speed up the certification process while still maintaining the high level of security seen in it so far. In addition, those payment giants will often continue to allow consumers to sign for EMV purchases rather than require consumers to enter a PIN, which some may prefer not to do.

"No one is clamoring for a PIN, consumers certainly are not, so doing the bare minimum necessary - which for most is chip-and-signature - makes business sense," Richard Willis, a partner in the payments systems group at the corporate law firm Alston and Bird. "Seen this way, it's a classic cost/benefit analysis … and no other non-market forces (e.g. consumer demand) are driving the broader move to PIN and its incremental benefits to security."

While there may still be some businesses that remain skeptical of how EMV can help them, the fact is that when they move to adopt it, the newfound fraud liability they face will go away quickly. EMV has been proven time and again to be much safer for consumers, merchants, and payment processors alike.