The other day I was in the check-out line at a small retailer when I noticed the POS card reader had a note that read, “Do Not Insert Chip Card.” Being in the card industry (and a naturally talkative person) I asked the cashier when they expected to have the card readers ready for chip cards. The cashier did not exactly share my enthusiasm for the topic (probably from fielding this question many times a day), but did manage to recite a few lines about it “coming soon” and even mentioned something about the October 2015 Liability Shift date, though she was unsure of what that date meant. I explained that because I’m presenting an EMV card but the store is not ready to run an EMV transaction, they are liable for this transaction if it turns out to be fraudulent or if I’m not who I say I am as the card holder. Well, there is really no quicker way to shine the light of suspicion on oneself than to make a statement like that in the check-out line. I’ve seen my youngest child, standing at the cookie jar with a palm full of crumbs looking less suspicious then I must have sounded in that moment.
“Only” 37 percent of U.S. retailers are EMV-ready, according to a recent survey by The Strawhecker Group (TSG). Actually, I’m not surprised or overly concerned by that number. After all, it took our friends to the north more than 10 years for their EMV migration. The U.S. is trying to do it in five. Granted, Canada is a very different financial institution market and it doesn’t have the same number of networks as we do, but it did have a government mandate, which the U.S. does not have.
We’ve known for a while that there’s been a pretty steep EMV learning curve for the industry as a whole. We’ve heard complaints that the conversion process has been clunky at times, particularly for organizations working through the process without a provider to help coordinate the many moving parts. And yes, retailers were understandably reluctant to roll out the new technology in the midst of the holiday season — during their most profitable quarter of the year — at the risk of interrupting the customer experience and their own bottom line.
But while I’m not surprised to see the adoption rate below 50 percent at this time, I do expect the rate to accelerate over the next 12 months as all stakeholders become more efficient and the process more streamlined. There are bottle-necks throughout the process that need to be addressed for sure, from card manufacturing and personalization, to issuance and card reader manufacturing. But with time comes experience, and the bottle-necks will clear.
Some say the 37 percent number is low and is evidence that the October 2015 date was too aggressive and the liability shift should have been pushed back. While I understand that sentiment, we should acknowledge that there’s a bit of human nature at play here. And there’s no fighting human nature. It’s like my son and his exams. No matter how much I remind, warn and insist, he always manages to wait until the very last minute to study for them. And if the exam date gets pushed back? Oh yeah, he’ll wait a little longer.
If the card associations pushed the liability shift back for EMV adoption, we probably wouldn’t even be at 37 percent today. Human nature. I, for one, will be happy when we get to a much higher percentage. Maybe then I can shop at my small retailer again without getting suspicious looks from the employees.