At this point, however, most major retailers have been certified. In addition, most smaller retailers found it fairly simple to become EMV-compliant because of bank-supplied POS equipment. But midsize retailers — between $500 million to $3 billion in sales — typically have POS systems that are over a decade old and require customization to implement EMV, says Kramer: “That led to delays — some are still not compliant and are paying the price.”
Certainly, there have been fewer chargebacks thanks to EMV, which experts agree is a good thing, though they maintain that the chip and signature technology is still prone to fraud — which could be reduced further with the chip and PIN technology used elsewhere. And, Shearman points out that banks have not invested the money they had previously “eaten” in chargeback costs in the retail community. But, on the flip side, online fraud has, as expected, risen significantly since EMV was implemented: “The fraudsters have moved over to the online market,” he says.
What’s coming down the pike with EMV
Contactless EMV was supposed to go live last spring, but the processing rules for banks are not finalized yet. By October 2017, fuel pumps were also supposed to be EMV compliant — but due to a lack of hardware, this date has been pushed out to 2020.
Some vendors are working to capitalize on these EMV obstacles by focusing on software that manages risk liability and fraud instead of EMV. Feedzai, for example, points out that for gas stations, the cost of upgrading equipment could be incredibly costly. “Instead of upgrading, many have begun to manage their risk on the backend, on the software level, as opposed to the hardware level with a chip — at a fraction of the cost,” says Nuno Sebastiao, CEO and co-founder of Feedzai.
In addition, he says, as adoption alternative methods of payment through mobile wallets continue to grow, EMV will become less necessary for some retailers. “This is really on a per-vertical basis, such as with gas stations,” he says. “But some retailers won’t want yet another point solution to manage fraud.”
The NRF’s Shearman disagrees, however, saying that mobile wallets are a fraction of a fraction of the payments market and are not a factor in EMV adoption. “Our State of Retail Payments survey last year found that EMV was the top payments challenge for 76 percent of retailers compared with 17 percent for acceptance of emerging payments types,” he says.
“EMV was largely the standard among major retailers during the 2016 holiday season and that should increasingly be the case among small retailers by holiday 2017,” he adds. “But retailers will continue to push to have chip and signature replaced with chip and PIN.”
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