Report: EMV adoption remains sluggish

Chip-based payment terminals seem to be everywhere. But that does not mean they are being used the way they intended.



However, almost a year after the imposed Europay, MasterCard, Visa (EMV) mandate deadline, barely one-third of retailers actually accept chip-based payments, according to an infographic from The Strawhecker Group (TSG).



EMV is a globally accepted payment card standard that uses an embedded microchip to provide unique data protection when the card is inserted into a chip-card reader. After the October 2015 liability shift, U.S. card-accepting merchants without the ability to accept EMV cards are liable for fraudulent transactions.



As the industry approaches the first anniversary of the EMV liability shift, 44% of U.S. card-accepting merchants have EMV terminals, and a mere 29% are processing chip-enabled transactions, the infographic revealed.



TSG’s January survey of payment processors and other payment providers estimated that more than 50% of companies would have an EMV terminal by this time, proof that adoption has slowed more than expected, according to a company statement.



“EMV terminal vendor supply and delays in the [device] activation/certification process are the bottlenecks in the migration,” said Jared Drieling, business intelligence manager at TSG.



Delays aside, TSG remains optimistic, estimating that consumers will be able to use their chip-based credit and debit cards at 51% of U.S. merchant locations by December. The sooner they make the move, retailers will protect themselves against liabilities — both big and small. For example, more than 60% of respondents experienced an increase in the number of chargebacks due to a lack of EMV compliance, the report said.



“It is clear that non-EMV compliant merchants have felt the impact of the liability shift,” said Drieling. “The good news is that as merchants refresh their terminals for EMV, they are also adopting the contactless capability which lays the foundation for future payments, such as mobile proximity payments.”