Merchants’ payments status update

Some lead, some lag on EMV conversion

Merchant EMV conversion likely slowed after the Oct. 1 deadline because many did not want to disrupt the busiest time of year for them: the holiday shopping season, reports Jared Drieling, business intelligence manager at the Strawhecker Group, Omaha, Neb., a consulting firm that focuses on the merchant acquiring side of electronic payments.

Some merchants delayed EMV migration completely until the holiday season ended to prevent more friction in the checkout line. “However, merchants need to understand the consequences of EMV migration fully now that non-EMV compliant merchants will bear the fraud liability risk,” he says.

The run-up to the liability shift deadline spurred many major retailers to replace their old point-of-sale terminals with ones that can read chip cards, and encouraged many issuers, primarily the large card issuers, to start issuing new chip cards, Drieling notes. Big-box retailers like Walmart and the large issuers have been ahead of the game, while small and medium-sized merchants and regional or local banks have typically been laggards in the migration, he says.

Small and medium-sized merchants or merchants that see little counterfeit card fraud may continue to take a wait-and-see approach—or simply decide the investment doesn’t make economic sense, Drieling says. Being EMV compliant isn’t cheap for issuers or merchants. EMV terminal costs range from about $100 to $600 each, depending on the number ordered and specific product features, while chip cards can cost issuers $1 to $4 per card.

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