Looking for Nationwide EMV by October? Don’t Hold Your Breath, Surveys Say

With just 55 days to go, separate studies released this week show that the Oct. 1 target date for the U.S. to adopt the EMV chip card standard is looking more and more like a psychological deadline than a real one. Both merchants and credit and debit card issuers are struggling to adopt the standard, the studies show. They also indicate yawning gaps in consumer and merchant education about EMV.

A survey conducted July 9-13 by the Associated Press and market researcher GfK indicates that, of the 41% of U.S. adults who have received a new payment card this summer, just 30% have received a chip card. That works out to 13% of all Americans, according to the AP and GfK, whose survey canvassed 1,004 people.

Among the people who have received a chip card, 35% so far have used it for an EMV transaction. EMV cards are overwhelmingly being issued with magnetic stripes as well as chips, so consumers can still swipe the cards if merchants aren’t equipped with chip readers. Meanwhile, while most Americans who have received a chip card say they understand how to use it, most also say they don’t understand why they’ve received it, according to the survey.

The AP-GfK poll, whose results were released Thursday, was conducted online.

Nor is the situation with merchants looking any more sanguine. The issues confronting mid-size merchants when it comes to EMV certification with processors for point-of-sale systems are already fairly well known, but among small merchants the challenges have more to do with awareness and education.

A separate study shows that, on the eve of a crucial deadline, most small U.S. merchants still aren’t aware of the card networks’ impending EMV liability shift, let alone prepared to accept EMV cards. Only 49% of merchants that have up to $20 million in annual revenue and that accept payments cards say they are aware of the Oct. 1 deadline, according to the Wells Fargo/Gallup Small Business Index poll, conducted July 6-10. The survey contacted some 600 business owners, of whom 41% accept debit cards and 35% take credit cards.

Merchants must be equipped to accept EMV cards by Oct. 1 or take responsibility for fraud losses stemming from counterfeit or lost-and-stolen cards, according to card-network rules. That liability is currently shouldered by issuers.

Among the card-accepting merchants, 31% said they have installed equipment to accept EMV cards. As for the other 69% that aren’t ready for EMV, only 29% said they plan to install the equipment by the deadline. Just over one-third said they’ll do it, but some time after October, and another 21% have no interest in upgrading at any time.

The survey also asked the lagging and not-interested merchants why they won’t become equipped for EMV in time to avoid the liability shift. Forty-eight percent said they don’t think upgrading will do anything for their business, while 46% don’t want to shoulder the equipment, software, and training costs. Some 41% of respondents said they aren’t worried about the fraud potential.

“While our industry has made great progress in the last year informing and preparing small-business owners for the EMV liability shift, the survey findings show us that we have more work to do,” Debra Rossi, head of Wells Fargo Merchant Services, said in a statement accompanying the release of the survey.

In other results, the survey showed 15% of respondents accept point-of-sale mobile payments through a mobile-enabled reader.