Plus, the U.S. credit card market is highly concentrated, Benitez says, with the top 10 card issuers representing the majority of cards in circulation. All 10 are on board with the change, which means most consumers will have a chip card in hand well before the deadline, if they don't have one already.
Orndorf adds that consumers are more likely now to hop on board a card change because of the recent flood of retail hacks. "All the data breaches of the last three years helped the situation," she says. Consumers are aware of the need for change. "Also Apple Pay coming out has shone a spotlight on security. Consumers are starting to take notice," Benitez says.
One noticeable gap in EMV reader adoption is on retail-branded store cards cards that can be used only at one company. "Initially they may think that they don't need to put a chip on those," Orndorf says. "As consumers start to use their chip cards and recognize in their minds that it's more secure, they may chose to use what they consider is the more secure card if their store card doesn't have a chip on it."
That means lost revenue for retailers, which may force retailers them re-think the store card and put chip on those as well. A chip can hold a lot more information, too, says Orndorf.
"Ultimately the chip can deliver things like loyalty rewards at point of sale. Many other types of applications can be added to that chip," she said, which may further push retailers in the chip direction for their store-branded cards.
Who will lead?
The question next will be who teaches consumers how to use the cards. Even though chip-reading terminals are already in stores, when will consumers start using them? And what kind of delays will that cause at the check out line?
Right now, Orndorf says, banks are educating their customers with how to use their new cards, but that responsibility will ultimately fall onto the person who has to make the transaction happen. "The retailer is going to have to educate their sales associates," she says. "It's not a smooth transition from swiping your own card to have to dip the card." Until consumers get into the store and try to use their new cards, she says, they can't understand what the change will be.
"Sales associates are going to be critical to keeping the line moving," she says.
Benitez points out the failure of consumers to embrace contactless credit cards 10 years ago as a sign that it's hard to get people to change en masse, but he sees hope in the acceptance of contactless EMV transactions already happening globally. Contactless EMV transactions "around the world is taking off, which is increasing card use and increasing revenue for merchants," he says. It's also increasing the speed at point of sale for consumers and that, ultimately, will decide how consumers adopt a new way to pay.
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