Patience at the checkout counter is advised this holiday season.
Chip cards and point-of-sale integration to accept them has not completely rolled out – either by card issuers or merchants – as quickly as some industry experts anticipated. As a result, consumers have little to no experience using a chip based EMV card at the point of sale and may need some guidance as they insert their card into the reader for the first time.
Due to the perceived complexity, some merchants have chosen to wait until after the holidays to implement EMV technology to prevent confusion and potential delays at the checkout counter.
Indications are that a transaction using a chip card takes longer to complete and definitely requires a different interaction at the point of sale. Customers must insert their chip card into the POS terminal and leave it in the card reader until the transaction completes. This definitely is a new consumer experience … and we all know that changing consumer behavior and adoption to new technology can take time! When it is forced – as in the case of EMV – it sometimes meets with resistance, even if the cardholder believes it to be more secure.
Consider the below statistics from Retail Systems Research on consumer experience using chip cards.
- 33% of card holders who’ve tried using EMV cards at POS did not know how to use them, and cashiers had to instruct them.
- Of the U.S. card holders who have used both EMV and mag stripe, 54% prefer mag stripe.
- 30% of those preferring mag stripe cards prefer them because they seem to be faster.
If they wanted to avoid assuming the liability of fraudulent card-present transactions, Merchants had until October 1st to update their payment terminals with new hardware and software that enables the acceptance of chip cards. If a merchant accepts a counterfeit, lost or stolen card after October 1st, and they have not upgraded, they are liable for that card-present transaction if it is charged back. Even with this shift in liability, many merchants have chosen not to upgrade yet, and in some cases where they have upgraded their POS terminal, they have not enabled the software for EMV, still allowing all cards to be swiped.
The conversion of merchant card acceptance devices will be a long process that may take years – especially in the small to midsize merchant space. Experts are confident that merchants will continue to upgrade and consumers will become comfortable with the new process to use their card over time.
It will be interesting to see what the consensus is regarding this new consumer experience after the 2015 holiday season, and if it does result in longer lines at the checkout counter or lost sales. Regardless, “chip” has arrived and is here to stay, so merchants and consumers will join the rest of the world in learning how to dip their chip!
What has been your experience?