Over the past few months, the world's three largest payment processing companies have announced plans to launch programs that will significantly reduce the time it takes to complete an EMV transaction. How that goes in actual practice remains to be seen, but the payments industry as a whole is starting to get a little more clarity on how that whole process will actually work, and what it means for both consumers and merchants going forward.
The big problem many have with EMV transactions in reality these days is simply that they take far longer to complete than the previous "swipe" method, with some estimates saying they add as much as 12 seconds to each purchase, according to a report from the Payments Review. That adds up pretty quickly for a person with a few other shoppers in front of them in line, and for retailers processing hundreds or even thousands of purchases each day, it's an even bigger problem. But with Visa, MasterCard, and American Express trying to speed up that process, it's believed EMV times can fall in line with previous industry norms while still retaining the added layer of security.
How will it work?
All versions of the new, faster EMV transactions, regardless of the payment giant behind the technology, will apparently be available to merchants free of charge, but there will be no requirement on the cardholders themselves, the report said. What that means is that while the software update required will be available for companies to install, consumers won't have to get new cards of any kind. This is merely an update to payment processing technology within point-of-sale devices.
How that impacts consumers in terms of how an EMV transaction is completed for them, though, is massive, the report said. A lot of the frustration with how EMV has worked in the past relates to the fact that consumers have to leave the card in the POS device for the entire transaction. With the new, faster transactions, people will simply be able to insert their cards, wait a few seconds, then remove them in a much shorter span of time, all before actually completing the purchase. That is, as long as the final amount of the transaction is known at time of purchase.
What does that mean for retailers?
If people are generally more satisfied with how EMV transactions work, and are therefore more likely to rely upon that type of purchase on a regular basis. That, in turn, makes the entire payments ecosystem a lot safer for everyone from consumers to payment processors because it significantly reduces instances of fraudulent transactions.
And because it requires no additional investment above and beyond the cost of EMV-capable POS machines, that means merchants have significant incentive to adopt as soon as possible. In many ways, this can be seen as the type of purchase that, while potentially expensive up-front, pays for itself over a relatively short period of time.