Are we ready for chip cards?
The October 1 liability shift in the United States is less than two months away. Are merchants equipped to handle chip/EMV cards? According to an article published by TheStreet, 47% of all merchant terminals will be able to read chip cards by the end of 2015. Further, are cardholders and merchant clerks prepared by understanding how to use the cards? Through my own informal study, I would say no for the most part.
Cardholder Confusion
As Commercial Card professionals, we have a head start on being familiar with chip cards, but, if you question your friends and family on this topic, you might get blank stares. This has been my experience.
TheStreet article reported that, by the end of 2015, 63% of credit and debit cards will be chip enabled. When I received my new business credit card with a chip, an accompanying brochure explained how to use it. I wonder how many cardholders will bother to read such material. Either way, I think my brochure is unclear. For example, it says I can still swipe my card at merchant locations with magnetic stripe point-of-sale (POS) devices. Hmmm... Since basically all U.S. merchant terminals will still have magnetic stripe readers, it sounds like I can ignore the chip altogether. Not so fast. Chip-enabled devices could generate an error message if a cardholder tries to use the mag stripe.
An article by Computerworld noted a consumer might give up using a chip card because the process takes at least a couple seconds longer than the “old way.” The article also described how the payment confirmation will vary by terminal type or store, which could cause confusion.
Links to Referenced Articles
- Why Aren't We Getting Chip and PIN Credit Cards? by Jason Notte, published by TheStreet
Some Users Will 'Kick and Scream' at Paying with Slower Chip Cards by Matt Hamblen, published by Computerworld
See also more EMV content on this website.
Merchant Confusion
When out shopping, I have been randomly asking store clerks if they are seeing many chip cards. One replied, “Do you mean a card that they wave over the machine?” Well, maybe—if the terminal supports near-field communication (NFC) technology—but when I pointed out the chip card slot on the POS device, she admitted she had not noticed that before. At a different store, a clerk said he did not know whether “that slot” worked.
Generally speaking, clerk training seems to be lacking. Pair untrained clerks with unaware cardholders and we get significant potential for checkout hiccups until everyone adjusts.
While POS equipment no longer looks like this, many U.S. merchants will not have chip-ready devices by year end.
What You Can Do
Per my advice in the January blog post on the different EMV options, if you are an end-user organization, ensure you understand your type of chip card, requirements for usage, what could go wrong and how to resolve any issues. For cardholders who make in-person purchases, train them accordingly.
Visit GoChipCard.com
You do not need to create training from scratch. The EMV Migration Forum and the Payments Security Task Force developed GoChipCard.com to assist consumers, merchants and issuers with the migration to chip technology.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…