EMV’s Slow Rollout — Viewed from the Hudson River Valley
EMV Adoption in Europe
Last spring, around this travel-y time of year, we had just returned from Europe and reported on the land of EMV use (that’s where the “E” in those initials comes from!). We observed how customers were adopting EMV by inserting their cards and using PINs or signing more frequently.
A Surprising Cash Preference
We were taken aback by the prevalence of cash transactions for routine purchases, such as those in grocery stores and taverns, surpassing our expectations. In certain areas, card usage seemed to be more prominent at local ATMs, where the availability of cash-back options was limited compared to our usual experience.
Back in the Hudson River Valley
After a year, we have returned from an extended trip to the East Coast, primarily in New York and the officially recognized region known as “Upstate.” Equipped with both traditional credit cards and recently upgraded debit cards with EMV chips, we embarked on our journey.
Choosing Credit or Debit
Since we actually like to follow some of the precepts we talk about in this blog (and since we’re just as alarmed by the constant security breaches as you are!), our goal was to mostly use credit where there was no upgraded POS device, and only use our business debit where the EMV-equipped terminal made it safer.
This worked out… most of the time.
The Risk for Non-EMV Compliant Devices
Credit card companies, of course, are no longer liable for fraudulent charges resulting from non-EMV compliant devices — and it was surprising how many merchants we saw in Manhattan were willing to take this risk.
Mixed Adoption Rates
One local grocery story had upgraded, as had, surprisingly, one regional bus company, whose services we used to leave the city and head upstate into verdant the Hudson River Valley for a few days.
Yet most of the merchants we came across, in our admittedly non-scientific sampling, fell into the “42% of retailers (who) have yet to upgrade their terminals,” according to a Huffington Post piece (itself citing Cardhub) on the slow pace of EMV adoption.
Concerns and Considerations
It is important to note that upgrading the terminal does not automatically imply the installation of software to make it “EMV-ready.” This means that a significant portion of retailers still do not have EMV capability despite having upgraded terminals.
“If a mom and pop shop has perfectly fine payment terminal that is relatively new, they’re not going to purchase a new terminal for $500 – especially when they could get around 7 years of use with their current terminals?,” the article asks, quoting one business consultant. Especially, he continues, “when you are highly unlikely to ever see a counterfeit card?”
However this same consultant goes on to say that the businesses he works with also worry “that their customers will be concerned that they don’t take security seriously if they don’t upgrade to EMV,” a category we definitely fell into! (Though among our traveling companions, we were the only ones even talking about using EMV cards — the hazards, perhaps, of regular “fintech” blogging?)
The Activation of Chip-Ready Terminals
And the number of chip-ready terminals may not be the biggest issue. NerdWallet goes on to say that “only 20% of credit card terminals in the U.S. had been activated for chip use through April.”
Quoted in the same piece, cyber security expert Brian Krebs suggested that rather than waiting for the ongoing rollout of chip-and-pin or chip-and-signature EMV rollout, “tokens” might be a way “to combat fraud. With tokenization, merchants’ computers don’t store credit card data at all. This approach assists merchants in avoiding the storage of card data for any duration and in the process decrease the likelihood that cyber crooks will target them for card data.”
The Future of Card Transactions
Meanwhile, the article concludes, “consumers are very comfortable transacting with cards,” Conroy says, “and changing consumer behavior is difficult, so cards will be with us for some time to come.”
Upgrade Your Payment Systems
Keep your customers comfortable, of course, but keep their data as safe as possible. Contact your AVPS rep for any upgrades — whether for EMV readers, upgrading online payment systems, mobile card readers, or more — that you may have been putting off.
Reporting from the Real World
And next spring, when we get to leave our bloggers’ garret again for another trip, we’ll report on the state of card security out there in the “real world” of travelers, diners, and customers just like yours.