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Predicting winners and losers in the EMV rollout

Jen A. Miller | July 28, 2015
On October 1, the liability for credit card fraud shifts from card issuers to retailers that haven’t transitioned to accept cards that use new EMV technology. Some groups will be more ready than others.

EMV losers

Mid-tier retailers, and those businesses in hospitality and restaurant fields, may have a harder time making the change. Those are industries "where they have a history of using third-party integrated point of sale systems that are more complicated to upgrade to EMV, and require more investment," Vanderhoof says. "Those types of businesses don't typically have the same level of expertise and internal resources available."

Vanderhoof points to owners of small, privately owned ATMs as being potential losers, too. Those "operators are going to have a tougher time meeting the fraud liability shift date because some of those ATM devices were not designed to be upgraded to EMV." And the ATMs that can be upgraded "come with a fairly significant cost," according to Vanderhoof.

Hackers are also potential losers. The move to EMV should cut down on fraud associated with card-present transactions, and while most experts expect fraud to shift to online transactions, that could also force e-retailers to buff up their security there, too.

Are consumers in between?

The added security and peace of mind automatically makes consumers winners, too. But how it will all go over with the shopping rank-and-file depends on the speed at which EMV is adopted (and how long lines at retailers could stretch as consumers figure out how to pay), and whether or not the costs for new materials or savings from reduced fraud are passed onto them. VanBrackle points out that when debit card transaction fees were capped in 2011, in most cases the savings weren't passed onto consumers.

The transition to EMV should be quick, but confusing for a short period of time, says Vanderhoof. "For a time, consumers are probably going to be confused as to how they actually pay at the retail store, but this will be short-lived, and we will get through this transition pretty quickly."

 

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