EMV's time has come, but despite the October fraud liability shift deadline and the big security advantages to consumers and retailers, it's unclear how much it will be noticed.
The big retailers are on it. Target made a point of reporting that it was ready with the point-of-sale equipment and an educational effort. Walmart also appears ready. In one recent store visit, the cashier had a good knowledge of the new cards and said some shoppers were already using them.
While the cards and terminals are out and operational in many places, the U.S. launch of EMV has been pegged to the Oct. 1 date when the liability for card fraud will shift from the issuers to whichever entity is least prepared for EMV, whether the retailer or the financial institution. The idea is to get everyone in the payments world to make EMV a priority. Even without chip-and-PIN authentication, it's a big step up in POS security, which everyone agrees is much needed.
Everywhere I go now, I look for the distinctive terminals with the card slot in the front, and in most major chains, as well as in smaller retailers, there they are on the counter. The degree of knowledge about EMV by store personnel varies widely and in many cases, I'm the one educating them, hearing things like, "Gee, I never noticed that little slot in the front."
I understand situations where the cost of the equipment outweighs the need to implement the system. For instance, retailers with typically small checkout rings—for instance, restaurants and dollar stores (if they take cards)—don't have much to lose in a fraudulent transaction and the tradeoff is well worth it, at least for now.
Eventually shoppers will start to ask to use their new EMV chip-enabled cards and, even if the ROI is not there, the obligation and need to meet the customers' desires will become a priority, as it should be.
I would hope that retailers with big-ticket transactions, like jewelers and upscale apparel shops, would be on top of EMV because they have the most to lose. But retailing is a all-consuming business and things like this don't become important until the last minute, which has arrived.
Also the retailers have a lot to deal with at the POS as the fourth quarter selling season approaches. Besides EMV, customers will also want to use their new mobile payment options like Apple Pay, Samsung Pay, Android Pay, CurrentC and PayPal. That's a lot to adjust to in the busiest time of the year.
I would have also hoped that the credit card industry would go easy on the retailers early on in terms of the fraud liability. But it is clear that they are going to hold firm to their deadline.
Looking beyond EMV at the POS, retailers also need to keep an eye on card-not-present fraud—that is, fraud related to e-commerce payments. Other countries that have implemented EMV saw a spike in online fraud as the frustrated criminals looked for new ways to ply their trade.
But ready or not, and many are not ready, it's time to bring up the curtain on EMV. Retailers that are ready need to redouble their educational efforts for employees and customers. They may even find it to be a promotional opportunity. Retailers that are not EMV ready need to reconsider their options, and soon.–Dan