Update on EMV®: Working Out the Wrinkles

In October 2015, the EMV fraud liability shift went into effect. This shift transfers certain fraud liability from card issuers to merchants, under certain circumstances, when merchants haven’t replaced magnetic stripe devices with new chip-enabled devices.

Delays in Activating EMV Terminals

Being capable of processing EMV cards (chip cards) and actually processing them, however, are two different things. Many merchants installed new chip-enabled terminals either before or soon after the October 1, 2015 liability shift date, but they still haven't activated them or trained their employees.

“Some merchants were nervous about making such a big change right before their busiest time of the year, so they held off on activating EMV acceptance on their new terminals,” says Randy Vanderhoof, executive director of the Smart Card Alliance. “I think we will see a significant jump in the number of merchant locations that are processing EMV chip cards during the first quarter of 2016.”[1]

For merchants with complex point-of-sale (POS) setups, there’s more to making the switch to processing chip cards than just installing new terminals. According to the National Retail Federation, it takes about 19 months for the average retailer to get a new chip- enabled payment system up and running — which is another reason many merchants weren’t prepared to process chip cards before the holidays.[1]

In addition, Vanderhoof adds that some merchants were ready to process chip credit cards before the holidays, but not chip debit cards. “They chose to delay implementation of the activation for all cards until they had both of them working.

Merchant and Customer Challenges

Among merchants that have begun processing chip cards, one of the biggest challenges appears to be helping customers learn how to insert their cards into the new terminals, instead of swiping them the way they always have with their credit and debit cards.

For example, the terminal may time out if the cardholder removes the card too soon — this is referred to as “tearing.” This can happen if the customer thinks the payment has been accepted, but it has really just been sent to the bank for authorization. Also, if the customer inserts the card while merchandise is still being scanned, the transaction may be nullified and the customer will have to begin again.

Another problem may occur if the customer- facing screen and the employee’s screen at the POS aren’t in sync with each other.

Adding to some of the customer confusion is the fact that not all chip-enabled terminals operate exactly the same.

Importance of Employee Training

According to a survey conducted by Stax, Inc.[2], 28 percent of customers said they “self- taught” themselves how to use the new chip-enabled terminals and 33 percent said they were taught by retailers. This makes it critical that POS employees be trained well in how to help customers complete chip card transactions. The better prepared your employees are to help customers, the more pleasant your customers’ experiences will be and the fewer delays there will be.

Available Online

EMV Information Toolkit from VISA®

Explore Visa’s interactive, online toolkit atwww.visachip.com/businesstoolkit for more information and resources on how to make a seamless transition to accept chip cards. 

From training to planning, this toolkit provides helpful information to make a seamless transition to chip-activated terminals. You can start at the beginning and go through the materials step-by-step or dive into the section that best meets your current needs.
Topics include:

  • Chip Technology Overview
  • 10 Steps to Implementing Chip Technology
  • Tools & Resources
  • Staff Training for Chip Cards

Access to the Visa online toolkit is also available at: pnc.com/merchantservices. PNC Merchant Services can also help you with the transition to accepting chip cards. Please contact us at 1-888-235-6959 if you have any questions or need any assistance.

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Important Legal Disclosures & Information

  1. http://www.cnbc.com/2015/12/15/few-retailers-accepting-chip-credit-card-payment-feature-for- holidays.html

  2. http ://www.business2community.com/finance/cashiers-key-effective-emv-chip-card-transition - 01416909#02cretEkSOKmAIhj.97

EMV is a registered trademark of EMVCo in the United States and is an unregistered trademark in other countries.

Visa is a registered trademark of Visa International Service Association and used under license.

Merchant Services provided by PNC Merchant Services Company and are subject to credit approval. PNC Merchant Services is a registered trademark of The PNC Financial Services Group, Inc.