Why is EMV more beneficial to merchants?

Category: Payment Processing Technologies

Over the past several months, the good aspects of EMV have been recognized by a large and growing number of merchants. But while adoption among retailers is expected to continue to higher levels throughout the remainder of the year, there may still also be a number of holdouts who remain skeptical about the benefits of switching to the newer, safer technology.

The reason for that hesitance is often a matter of economics, according to a report from the Wall Street Journal. The cost of buying EMV-capable point-of-sale terminals may be a little difficult for smaller merchants to handle, even if they provide significant benefit. That comes in addition to the fact that these companies have likely also heard consumers can get testy when it comes to EMV because these transactions take longer to complete than traditional credit card swipes.

Another issue, though, is that these terminals also cause problems when it actually comes to being able to accept EMV transactions, because the certification process for all three of the nation's largest payment giants can take months to complete, the report said. As such, the combination of potential consumer frustration and cost with no apparent immediate benefit may be enough of a barrier to entry to keep some businesses on the sidelines.

Chip cards are becoming more common, but how do businesses prepare?Chip cards are becoming more common, but how do businesses prepare?

Other issues
The problem that these holdouts might face is that they will have to deal with greater risk of card-present payment fraud if they don't make the switch, the Wall Street Journal said. Yes, traditional credit card purchases take an average of several seconds less to complete, but the added risk they bring could leave merchants holding the bag for fraud costs. Right now it's a a bit of a balancing act.

"Many don't yet take EMV because the longer lines tend to be a much greater hit than the fraud that they'd have to pay for," Joseph Koenig, a technology manager at a point-of-sale software company, told the newspaper.

Problems for consumers
At the same time, a large and growing number of consumers have chip-enabled cards, and indeed are growing more accustomed to using them in their everyday lives, according to a report from Kansas City, Missouri, television station KSHB. While the majority of stores still don't have EMV certification, many of the nation's biggest merchants do, and that can lead to other issues for cardholders.

"It's so different [from] store to store, so I just wish they would get that standardized," one shopper told the station.

In fact, many merchants have taken the plunge on buying an EMV machine, but haven't yet gotten through the certification process, the report said. As a result, many have taken to posting signs reassuring customers that they'll be set up to do so soon.

The more businesses do to help consumers understand the EMV process on their end, the better off all involved might be when it comes to having realistic expectations for the implementation of new POS terminals over the next several months and beyond.