Chip-Enabled Cards See Rise In Use In One Year After Introduction
Of course, headaches may be on the horizon as the holiday shopping season is about to start. Some shoppers have complained that checking out with a chip card takes longer and stores are still facing delays in getting these terminals working right.
According to National Retail Federation General Counsel Mallory Duncan said the transition has been challenging for customers and merchants. It’s not a change that anybody wanted because of the expense, and it still doesn’t protect customers the way people need it.
Chip-enabled cards, also known as EMV (EuroPay, MasterCard and Visa) are much more secure than cards that have the magnetic strip because they produce a unique code for all transactions. This makes it harder for people to counterfeit.
In order to speed up the switch, U.S. merchants are now being held accountable for deceitful transactions that are made with bogus cards if they haven’t installed a chip-reading terminal. Since the liability was introduced Oct. 1 of last year, more merchants are using these devices.
Also seen as a benefit is the number of fraud cases, which has dropped significantly. Visa said there’s been a 47 percent drop in merchants experiencing counterfeit fraud in May 2016. MasterCard said there’s been a 54 percent decline in fraud for April. However, for those companies who have yet to implement the chip card readers, there’s been a 77 percent increase in fraud cases.
According to Senior Vice President of Product Delivery-EMV Chiro Aikat, the EMV is doing what it’s designed to do.
The NRF said the shift is costing retailers between $30 billion and $35 billion to put into action. And, in August, the NRF released a study that showed more than three-quarter of all retailers said the new chip technology is the leading payment challenge.
According to retail advocates, the better option would have been to switch to chip cards needed a pin, not a signature. According to Duncan, a person who steals your card won’t be able to use it because they don’t have a pin.
Visa and MasterCard have implemented steps to streamline the process. However, other card brands such as American Express and Discover are experiencing a backlog in their pipeline. And, for some shoppers, the fear of lines at store checkouts is a possibility.
Henry Helgeson co-founder and CEO of Cayan, said the biggest shopper frustration for this technology is going to be hurdles retailers are likely to face this holiday shopping season. The answer is to lessen the transaction time, which is why processors nationwide are trying to do.