Video: The Chips are Down: EMV is Here, and It's Only the Beginning

Described as one of the most significant technological changes in the history of credit cards, the 2015 EMV® liability shift rocked the payments industry boat quite a bit. But according to experts, there's more that still needs to happen in the merchant acquiring space to bring EMV to a state of maturity.  

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The Chips are Down: EMV is Here, and It's Only the Beginning

Jun 27, 2017

Video: The Chips are Down: EMV is Here, and It's Only the Beginning

Described as one of the most significant technological changes in the history of credit cards, the 2015 EMV® liability shift rocked the payments industry boat quite a bit. But according to experts, there's more that still needs to happen in the merchant acquiring space to bring EMV to a state of maturity.

The move to chip cards in the United States has been praised as a huge success and critiqued as not moving quickly enough – which means the objective assessment probably lies somewhere in between. As we approach the one-year anniversary of the liability shift, we took a look where gaps still exist.

Merchant adoption

We all know how complex and interconnected the U.S. payments system is, meaning that the number of players affected by the EMV rollout affects was enormous. But the rollout was not universal.

According to Mastercard®, about 80 percent of its U.S. consumer credit cards are chip-enabled. Additionally, 1.7 million merchants on their network are chip-active, roughly around 30 percent of the U.S. merchant population. Visa® places their merchant adoption at around 35 percent.

It's been mostly the very large and very small merchants who have adopted chip cards in the greatest numbers. This means many of those still holding out on upgrading their terminals are mid-sized merchants, who have different point of sale (POS) and software requirements.

So another hindrance to adoption is also the fact that the new technology was not available to all merchants yet. But industry watchers assure us: it will come.

Education for merchants and consumers

A common theme heard throughout the industry is the need for more education and awareness among both merchants and consumers. If merchants don't understand the value of the upgrade, they will continue to look for reasons to avoid taking the step to EMV. More than anything, though, players in the space want merchants to understand the liability they have when they opt to not accept chip cards. Those in the merchant acquiring space know that EMV acceptance is a surefire way to decrease chargebacks, which is something every merchant wants as well.

As even more chip cards are issued, many also see this as a customer relationship issue, anticipating that consumers will ask their merchants if they accept chip cards. Card brand solutions that can replicate the process and speed customers were used to with magnetic stripes will be in good shape to answer complaints that consumers were burdened by using their chip cards.

Regardless of the motivation to adopt EMV, the reality is that chip cards and payment technology aren't going away. In fact, most experts forecast even more technological changes in the future to address fraud concerns. So in a way, EMV is just the beginning.