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Target is an exception, however. Research by First
Annapolis Consulting revealed most merchants are
unaware of EMV and unprepared for the 2015 deadline.
In April, the consultancy surveyed 200 U.S. merchants
from a diverse set of verticals, although the restaurant and
retail sectors accounted for 28 percent of respondents. The
sample was also skewed toward larger merchants, with 40
percent reporting $100 million or more in revenues, First
Annapolis noted.
Here are some of the findings:
Insider's report on payments • 24 percent of respondents indicated they were
aware of the upcoming requirements for EMV
compliance.
EMV is coming, but when, • 28 percent had heard about the requirements but
did not know the details.
and is it really necessary? • Nearly half had no idea what EMV was or why
they should care.
By Patti Murphy • 80 percent said their POS equipment either was
not EMV capable or that they did not know if it
ProScribes Inc. was.
• Over 60 percent either had not yet decided to
idespread implementaion of Europay/ upgrade to EMV terminals or had decided against
MasterCard/Visa (EMV) is expected in 2015, moving to EMV terminals.
and with it, huge reductions in card fraud.
W So where is my chip card? Of the five cards "Clearly, it is early days for the U.S. EMV migration and,
I carry in my wallet – one credit, three debit and a prepaid among all the other migration activities, the industry
card – not one has been replaced with an EMV-compliant continues to face a significant educational challenge in the
card, even though two have been replaced over the past merchant market," wrote Marc Abbey, a partner, and Scott
year due to data breaches that may have compromised the DeHaven, a consultant, at First Annapolis.
accounts. I know I'm not alone.
Nick Holland, Senior Analyst, Payments at Javelin
EMV is a global standard for the interoperability of chip Strategy & Research, echoed that sentiment. "With exactly
cards capable of authenticating payment card transactions 18 months to go until the EMV liability shift for merchants
at POS and ATM locations. It is supposed to replace and issuers, clearly a great deal of work remains if the
mag stripe card use at retail POSs. EMV has had broad U.S. card payment industry is to smoothly transition from
adoption, though not in the United States. Worldwide, magnetic-stripe cards to chip cards," Holland said. "Before
more than 2 billion EMV-compliant chip cards are in the shift can take place, the industry needs to focus on
circulation, according to EMVCo, the organization behind primarily educating consumers and merchants, while in
the standard, which also claims there are over 37 million tandem developing a roadmap for retiring the magnetic-
EMV-compliant POSs around the globe. stripe from card payments."
U.S. retailers have until October 2015 to become EMV- The author of a Javelin report titled EMV in USA:
compliant; gasoline stations with automated fuel Assessment of Merchant and Card Issuer Readiness,
dispensers get additional time. Thereafter, if a breach or Holland predicted that by the end of 2015, more than 166
other fraudulent activity involving debit and credit card million EMV credit cards will be in circulation in the
data occurs, the liability gets pinned on whichever party United States (about 29 percent of all credit cards). EMV-
isn't EMV compliant: issuers who failed to issue EMV- compliant debit and prepaid cards should number about
compliant cards or retailers without EMV terminals. 105 million (approximately 17 percent of all debit and
Implementation slow, costly prepaid cards) by then. Holland expects ubiquity – which
he defines as 96 percent of credit and 98 percent of debit
Target Corp., still smarting from a massive 2013 data and prepaid cards being EMV compliant – will take until
breach, is the first big retailer to put significant support the end of 2018.
behind EMV. It expedited plans to move its proprietary
credit and debit cards to EMV-compliant chip and PIN Cost is a primary reason for lagging card issuance. By
technology, in partnership with MasterCard Worldwide. most estimates it costs about $3 to produce a chip card
The giant retailer also said it will have EMV-compliant compared with less than a dollar to produce a mag stripe
POS devices in place at all its outlets by September 2014. card. Terminal upgrades are costly, too.
32
Target is an exception, however. Research by First
Annapolis Consulting revealed most merchants are
unaware of EMV and unprepared for the 2015 deadline.
In April, the consultancy surveyed 200 U.S. merchants
from a diverse set of verticals, although the restaurant and
retail sectors accounted for 28 percent of respondents. The
sample was also skewed toward larger merchants, with 40
percent reporting $100 million or more in revenues, First
Annapolis noted.
Here are some of the findings:
Insider's report on payments • 24 percent of respondents indicated they were
aware of the upcoming requirements for EMV
compliance.
EMV is coming, but when, • 28 percent had heard about the requirements but
did not know the details.
and is it really necessary? • Nearly half had no idea what EMV was or why
they should care.
By Patti Murphy • 80 percent said their POS equipment either was
not EMV capable or that they did not know if it
ProScribes Inc. was.
• Over 60 percent either had not yet decided to
idespread implementaion of Europay/ upgrade to EMV terminals or had decided against
MasterCard/Visa (EMV) is expected in 2015, moving to EMV terminals.
and with it, huge reductions in card fraud.
W So where is my chip card? Of the five cards "Clearly, it is early days for the U.S. EMV migration and,
I carry in my wallet – one credit, three debit and a prepaid among all the other migration activities, the industry
card – not one has been replaced with an EMV-compliant continues to face a significant educational challenge in the
card, even though two have been replaced over the past merchant market," wrote Marc Abbey, a partner, and Scott
year due to data breaches that may have compromised the DeHaven, a consultant, at First Annapolis.
accounts. I know I'm not alone.
Nick Holland, Senior Analyst, Payments at Javelin
EMV is a global standard for the interoperability of chip Strategy & Research, echoed that sentiment. "With exactly
cards capable of authenticating payment card transactions 18 months to go until the EMV liability shift for merchants
at POS and ATM locations. It is supposed to replace and issuers, clearly a great deal of work remains if the
mag stripe card use at retail POSs. EMV has had broad U.S. card payment industry is to smoothly transition from
adoption, though not in the United States. Worldwide, magnetic-stripe cards to chip cards," Holland said. "Before
more than 2 billion EMV-compliant chip cards are in the shift can take place, the industry needs to focus on
circulation, according to EMVCo, the organization behind primarily educating consumers and merchants, while in
the standard, which also claims there are over 37 million tandem developing a roadmap for retiring the magnetic-
EMV-compliant POSs around the globe. stripe from card payments."
U.S. retailers have until October 2015 to become EMV- The author of a Javelin report titled EMV in USA:
compliant; gasoline stations with automated fuel Assessment of Merchant and Card Issuer Readiness,
dispensers get additional time. Thereafter, if a breach or Holland predicted that by the end of 2015, more than 166
other fraudulent activity involving debit and credit card million EMV credit cards will be in circulation in the
data occurs, the liability gets pinned on whichever party United States (about 29 percent of all credit cards). EMV-
isn't EMV compliant: issuers who failed to issue EMV- compliant debit and prepaid cards should number about
compliant cards or retailers without EMV terminals. 105 million (approximately 17 percent of all debit and
Implementation slow, costly prepaid cards) by then. Holland expects ubiquity – which
he defines as 96 percent of credit and 98 percent of debit
Target Corp., still smarting from a massive 2013 data and prepaid cards being EMV compliant – will take until
breach, is the first big retailer to put significant support the end of 2018.
behind EMV. It expedited plans to move its proprietary
credit and debit cards to EMV-compliant chip and PIN Cost is a primary reason for lagging card issuance. By
technology, in partnership with MasterCard Worldwide. most estimates it costs about $3 to produce a chip card
The giant retailer also said it will have EMV-compliant compared with less than a dollar to produce a mag stripe
POS devices in place at all its outlets by September 2014. card. Terminal upgrades are costly, too.
32
