EMV Merchant Adoption Slower Than Expected

Only 37 percent of U.S. merchant locations are EMV-ready four months after the October 1st, 2015 liability shift.

According to a survey by the Strawhecker Group (TSG), by June 2016, it is estimated that consumers will be able to use their EMV credit and debit cards at 50 percent of U.S. merchant locations. EMV-readiness is not expected to reach a threshold of least 90 percent of merchant locations until 2017 – more than 15 months after the shift. EMV 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. EMV is an acronym for Europay, MasterCard, and Visa. After the October 2015 liability shift, U.S. card-accepting merchants without the ability to accept EMV cards may be liable for fraudulent transactions.

TSG found that the three biggest hurdles slowing EMV implementation are payment processor readiness, gateway readiness, and technical staff resource availability.

Nearly 40 percent of respondents felt that media coverage had a negative impact on their EMV implementation efforts. One survey respondent said, “(it) confused the merchants more than it helped”, while another added “it was a Y2K kind of scare thing; the world is going to end if you don't take care of EMV.”

“It appeared that some merchants delayed EMV migration completely until the holiday season ended to prevent friction and confusion at the checkout line,” said Jared Drieling, Business Intelligence Manager at TSG. However, merchants need to understand the consequences of delaying EMV migration now that they will face the fraud liability risk. “I suspect that many merchants that have delayed, especially merchants in higher risk categories, felt the impact of the liability shift last year and we’ll see them aggressively ramp up plans to migrate.”