Dive Brief:
- Some 42% of retailers across the United States still require customers to swipe their credit cards, even though chip-and-PIN (EMV) cards have been the rule since Oct. 2015, according to a new study conducted by personal finance website CardHub.
- Retailers that fail to implement EMV cards could be liable for more than $8 billion in fraudulent transactions each year.
- U.S. consumers are still unaware of the goals behind EMV conversion, and 96% are willing to shop retailers that continue to permit swipe payments.
Dive Insight:
Liability for fraudulent transactions has not been a threat sufficient for many U.S. companies to comply with EMV directives, according to the results of a CardHub survey of 55 major retailers and 1,000 consumers. Two out of five (42%) retailers have so far not upgraded any of their equipment to handle chip-and-PIN cards, and another 24% have converted less than half of their terminals since the Oct. 2015 deadline for deployment.
Alarmingly, about 43% of retailers that have had their data compromised in the last five years are behind on implementation, including big names such as Costco and Kmart. But it may not matter to American shoppers long accustomed to swiping: More than half (56%) of survey respondents said they don't care if a retailer allows swipe payments, and an additional 40% said it isn't a deciding factor in shopping.
Some 41% of the consumers surveyed haven’t received or don’t know if they have received an EMV card, and awareness of their purpose is poor, too. Half of respondents said they didn’t know if EMV cards are better at preventing fraud than swipe cards (they are), and 41% think that debit cards are safer than credit cards (they aren’t). Among consumers who check their credit scores, 44% know that chip cards are safer, compared to just 24% of those who don’t.
With U.S. retailers so lackadaisical about EMV conversion and most consumers unaware of any problem, more and bigger breaches are likely in 2016—and that may be the only thing that gets retailers up to speed on implementation.
EMV takes its name from the three companies that created its chip-integrated standard (Europay, MasterCard and Visa, respectively). The technology is designed to help better authenticate credit and debit transactions: Each time a chip-enabled card is used, it creates a unique and dynamic transaction that’s significantly more fraud-resistant.
But processing EMV cards is slightly more time-consuming than processing traditional magnetic stripe cards. EMV cards are dipped into a reader, as opposed to swiped, and they cannot be removed until the transaction is complete. In some cases, that delay can create longer lines, impatient customers and even result in missed sales.
