NRF: EMV shift expected to go smoothly

Despite all the commotion surrounding the Oct. 1 deadline for U.S. retailers to accept EMV-compliant payment cards, the National Retail Federation (NRF) expects no drastic shifts to occur.

“Tomorrow, nothing will change for shoppers except that some will begin using their cards differently,” said Mallory Duncan, senior VP and general counsel of the NRF, in a statement. “Consumers with chip cards will begin ‘dipping’ their cards, instead of swiping them to pay at chip equipped stores. If you are part of the majority of shoppers who still haven’t received a new chip card from your bank, you can still use your old magnetic stripe card at any retailer just as you do now.”

"Banks have failed to meet their own deadline for converting to chip cards, but America’s retailers are open for business either way,” added Duncan.

In conjunction with Duncan’s less-than-ringing endorsement of the efforts banks have made to step up their own EMV compliance, the NRF unveiled a series of what it calls facts about the current state of EMV.

These include:

• According to a recent CreditCard.com survey, only 40% of cardholders have gotten a new chip card.

• Credit card companies have been unable to grant the necessary software and payment terminals certifications to stores nearly fast enough to meet their own deadlines. Consequently many retailers have chip-reading terminals set up in their stores, but they can’t turn them on until they’ve been certified by the credit card companies.

• Many retailers are going beyond the chip card mandate and voluntarily implementing data encryption and tokenization to safeguard the payment authorization process.

• Nearly all major retailers are working to implement data encryption/tokenization, which many experts believe will do more to protect shoppers’ financial data than U.S.-style EMV cards.

• The transition to chip and signature cards is still only a half-measure—cards without PINs are not the safest possible measure.

• Most banks refuse to include PINs on credit cards, but the majority of U.S. consumers prefer to use chip-and-PIN cards rather than chip-and-signature cards.

NRF and the retail industry have called for chip-and-PIN cards, which are widely used in Europe, but the card industry is issuing cards in the U.S. that only require what the NRF terms a “fraud-prone” signature as proof of identify.