Longer Checkouts for EMV Don’t Seem To Be Fazing Consumers in the Early Going

When the U.S. rollout of EMV cards started in earnest last year, many experts predicted consumers would soon tire of the time-consuming chip-reading routine, putting pressure on the payments industry to usher in contactless EMV and more mobile wallets. But that’s not happening, at least not all that much and not so far, according to Ingenico Group, a major point-of-sale terminal supplier.

“A lot of analysts were predicting there would be [cardholder] impatience, and it would come early,” Greg Burch, vice president of strategic initiatives at Ingenico, tells Digital Transactions News. But it turns out many consumers, with a wary eye on well-publicized data breaches, view chip cards as having beefed-up security, and they’re willing to trade some of their time for what they view as incremental protection, Burch adds.

“A lot of [experts] didn’t see [cardholders] making that connection,” Burch says. In reality, while chip cards guard against card counterfeiting, they don’t in themselves secure cardholder data in merchant systems.

About 750,000 U.S. merchant locations, or 17% of all face-to-face merchants, are able to accept EMV cards so far, Visa Inc. reported last week. Some 200 million EMV cards are now in circulation in the U.S. with the Visa brand, the network also said.

With so-called contact EMV cards, the kind most financial institutions are issuing, consumers must insert the card into the terminal chip reader and leave it there for a number of seconds while the device interacts with the chip. This adds significantly to the time it takes to check out compared to the familiar swipe of a mag-stripe card.

U.S. card issuers have pumped out EMV cards in response to a card-network rule that took effect Oct. 1 and assigns liability for counterfeit card losses to the party not equipped for EMV. In cases where the card is an EMV card and the merchant is equipped for it, the liability remains with the issuer.

Nearly all of these cards are contact-only cards because of the added expense issuers incur for contactless cards, which require an antenna and some wiring in addition to the microchip. Contactless cards interact with a POS reader using near-field communication (NFC), which means transactions can be completed with a simple wave or tap.

But consumer complacency with contact EMV may not last, Burch warns. Ultimately, cardholders will want both the added security and faster checkout time offered by contactless EMV, he predicts. Not only does contact EMV take longer, it also tends to momentarily confuse customers at the point of sale as they work out whether to swipe or insert their cards. “All of that will drive contactless EMV,” Burch says.

Merchants, too, are likely to push for contactless cards as they see more and more contact cards enter the market, adding to checkout times. Many merchants, particularly groceries and fast-food outlets, “are going to want something faster,” Burch says, to maximize throughput. “Probably later in the year, we’ll see contactless EMV.”

Nearly all new EMV terminals come with NFC capability built in, waiting for merchants to switch it on with a software download. Right now, for most large merchants at least, it’s a matter of working through a few other POS priorities. “Number one is PCI compliance,” Burch says, referring to the Payment Card Industry data-security rules. “Number two is EMV compliance. Number three is contactless. If they haven’t turned on NFC, it’s because they’re still working their way through number one and number two.”