American consumers are getting EMV cards with chip technology at a vast rate. Not only are consumers acquiring cards with EMV chips, they are starting to require merchant compatibility as well. Any merchant that does not accept EMV technology could start losing out in today’s processing world. This need not be an issue if merchants upgrade to EMV standards. A recent article by creditcards.com outlines a new survey to find out how many consumers now have EMV compatible cards.
“A new nationally representative telephone survey of 932 credit cardholders commissioned by CreditCards.com found 70 percent of U.S. credit cardholders now carry an EMV chip card. Issuance of cards bearing the fraud-fighting electronic chips has surged dramatically since Oct. 1, 2015. That’s when liability for some fraud shifted from card issuers to merchants that can’t accept the new cards. When you compare data from the new poll to a similar one CreditCards.com conducted in September 2015, and extrapolate it across the U.S. population, it means approximately 30 million Americans have received their first EMV card in the past six months.“ Source.
Approximately 40% of merchants have EMV compatible equipment, and 70% of the public has EMV cards. The added security for the merchant and the consumer is the key part of the equation. Merchants who upgrade now will be on the forefront, and could see a push in sales numbers from being able to accept the cards.
Furthermore, America is still doing a lot of “chip and sign” transactions where EMV technology is available. This is where the card is read by the chip but the customer still signs the receipt. This is not as secure as “chip and pin”, where the card is read by the chip and then the customer enters pin. Europe is on the forefront of “chip and pin”, and America would do well to take suit.
Here is where the rubber meets the road for merchants. In fraud liability for counterfeit transactions, if a customer has a regular magnetic stripe card and the merchant has a magnetic stripe reader, liability would generally not fall on the merchant. Same thing goes for if a customer and merchant both have EMV chip card and reader, no liability generally for the merchant if it’s a counterfeit transaction. The problem arises when a customer has a chip enabled card, but the merchant has only a magnetic-stripe reader that is not chip compatible. When this is the case and there is a counterfeit transaction, the merchant is generally held liable because they have not adopted and upgraded to the new EMV capable technology.