Study: EMV lags other payment security options

Retailers have yet to make a major move toward EMV compliance, but that doesn’t mean they are ignoring the need to secure card-based transactions.



According to a new special report from Boston Retail Partners, “Payment/Data Security in an Omnichannel World,” only 10% of retailers are performing EMV-enabled transactions that are working well, with another 12% saying their EMV-enabled transactions need improvement.



However, 53% of retailers plan to implement EMV within 12 months. Thus EMV should have a significant impact on retailers’ technology activities in 2016 despite its small impact so far.



While the use of EMV-compliant terminals weakens the incentive for thieves to steal credit card information, EMV adoption by a retailer in and of itself does not do anything to actually reduce the risk of a breach. Retailers demonstrate awareness of this fact with relatively high levels of end-to-end encryption (E2EE) usage.



Forty-nine percent of retailers have implemented E2EE, which eliminates encrypted data at rest and keeps the encryption key outside the retailer’s environment. Thirty-seven percent say it currently works well, and another 29% plan to implement E2EE in the next 12 months.



The next protective layer involves a process called tokenization, which enables retailers to remove sensitive information from the network. This is achieved by replacing the full credit card number with a token string that has no value. Similar to encryption keys, the token vault, which is utilized to generate tokens, should be maintained outside of the retailer’s environment.



Forty-one percent of retailers use tokenization, with 25% saying it works well and 22% planning to implement tokenization in the next 12 months.



The report also examined mobile payment trends. Currently, PayPal is the leading form of mobile payment with a retailer acceptance rate of 20%. Apple Pay and Samsung Pay (16% each) follow. Interestingly, only 8% of retailers currently accept Android Pay, behind MasterCard PayPass and Visa Checkout (14% each).



However, in the next 12 months, 24% of retailers plan to implement Apple Pay. This far outpaces any other form of mobile payment, such as PayPal (14%) or Samsung Pay (12%), meaning Apple Pay should be the most widely accepted mobile payment service by the end of 2016.