WASHINGTON–Retailers have done their job when it comes to moving to EMV credit card terminals, but the “card industry has dropped the ball,” according to the National Retail Federation.
In a blog post, Mallory Duncan, senior VP and general counsel with the NRF, said a survey it conducted found that 48% of retailers responding have EMV credit card terminals in operation in their stores, and 86% expect to have them in operation by the end of the year. Of those who don’t have EMV in operation yet, 57% say they have installed the equipment but are waiting for it to be certified by the card industry, according to Duncan.
“Those numbers are considerably higher than those pushed out by the banking industry, which has tried to portray retailers as slow to adopt the new system,” wrote Duncan. “But the survey found that EMV is a top priority for retailers – 58% of those surveyed called it their top payments-related challenge for 2016, and 72% said it is their top payments initiative for the year.”
According to the NRF, the key issue beyond the number of retailers that have installed the new equipment is the number waiting to get it certified.
“Disappointingly, the card industry has not provided enough personnel or other resources to ensure that certification happens in a timely manner,” said Duncan. “At this point, many retailers have had new chip card readers sitting next to their cash registers for nine months – ever since the target date for conversion last October – waiting for the card companies’ blessing. Many large national chains have been certified, but mid-size retailers are facing a long the wait.”
According to Duncan, the delays have left consumers “confused” over whether to swipe or dip their cards in the terminals.
“It also means that many retailers have been stuck with millions of dollars in fraud costs they shouldn’t have to bear: Under new card companies rules that took effect in October, if a counterfeit chip card is used in a non-chip card reader – or a chip reader that hasn’t been certified – the retailer has to absorb the fraud cost,” Duncan stated. “In addition to fraud involving the new chip cards, some retailers say fraud from traditional magnetic stripe cards – which is the banks’ responsibility – is being improperly attributed to lack of a chip reader and charged to retailers.”
Duncan said the recent announcements by Visa and MasterCard to speed the process, which CUToday.info reported earlier, are “too little too late for retailers.”
“The largest frustration in the debate over who’s to blame for how fast or slow EMV conversion occurs is that the cards being issued by virtually all U.S. banks are chip-and-signature rather than the chip-and-PIN used throughout the rest of the world,” said Duncan. “The new EMV card readers are costing merchants billions of dollars to put in place. Yet even if 100% of retailers had installed chip readers and 100% of those installations had been certified, chip cards that work with an easily forged signature provide a fraction of the security of those that work with a secure, secret personal identification number.”