EMV or chip-based credit card processing is all over the airwaves right now as the processing industry prepares for the October 2015 liability shift from banks to merchants for fraudulent transactions. At Instore, we’re testing a variety of EMV devices so our merchants will have an option should they choose to support EMV come October.
However, we don’t recommend early adoption of EMV, for the following reasons:
- EMV devices and standards are a moving target. Will the implementation of EMV be “chip and pin” or “chip and signature”? How many chip-based cards will actually be in circulation? How quickly will emerging EMV readers be certified? Until we know the answers to these questions, it’s better to not be an early adopter.
- Merchant exposure to the liability shift is quite small. Remember, if the processing industry sticks to the current time frame, starting in October, if a customer presents an EMV card, and you swipe it (because you don’t yet have a chip reader), and the card turns out to be fraudulent, you are on the hook for the amount of that transaction. Merchants with small ticket sizes and/or limited fraud histories have very little exposure.
- Early EMV implementations have caused workflow bottlenecks as the time required to process via EMV is longer than a traditional swipe. For high throughput retailers, an EMV slowdown will not be welcome.
Every good business wants to be prepared for technology shifts like the shift to EMV. Given EMV’s widespread adoption in Europe and Canada, the shift is likely to happen, but probably over years not months. We recommend taking a wait-and-see approach.