US EMV terminal adoption ‘sluggish’

The adoption of EMV terminals in the US has been ‘sluggish’ with less than half of US card accepting merchants using them, according to a new survey.

The Strawhecker Group (TSG) survey also found that less than a month away from the one year anniversary of the EMV liability shift, only 29 per cent of US merchants are actually able to accept chip-based transactions.

TSG’s previous survey, estimated that by now more than 50 per cent of merchants would have EMV terminals, indicating a much slower pace of implementation than expected.

EMV, an acronym for Europay, MasterCard, and Visa, is a globally accepted card standard that uses an embedded microchip to provide unique data protection when the card is inserted into a chip-card reader.

After the October 2015 liability shift, US card-accepting merchants without the ability to accept EMV cards might be liable for fraudulent transactions.

The report, which surveyed 79 payment service providers that service more than 3.4 million merchants – nearly half of the US card-accepting market – also indicated that over 60 per cent of respondents have experienced an increase in the number of chargebacks due to a lack of EMV compliance.

Lisa Baergen, director at behavioural biometric firm, NuData Security, said: “The implementation has been a long and difficult process, particularly for merchants, where the cost to implement is relatively high, and the perceived value was just not there.

“While the deadline for the US switch was October 2015, not all merchants have upgraded. Furthermore, these new EMV cards are still compatible with old systems, which put them at the same risk for fraud as they were before the switch.”

Jared Drieling, business intelligence manager at TSG, added: “EMV merchant adoption has slowed down a bit, at least comparatively speaking to our last EMV survey results in January 2016.

“Approximately one-third of merchants have activated EMV systems despite the larger base of US merchants with EMV terminals in place. EMV terminal vendor supply and delays in the terminal activation/certification process are the bottlenecks in the migration.”

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