Retailers lag on EMV card technology transition, study reveals
Despite a deadline of October 2015, some 42 percent of retailers have yet to update payment terminals to be EMV compliant.
What’s even more startling is that 43 percent of retailers that suffered some sort of data breach in the past five years have not made the technology transition, according to a new Cardhub study, which notes there are $8 billion fraudulent card purchases each year in the U.S.
Financial institutions, notes Cardhub research analyst Alina Comoreanu, have been the most active and progressive in moving to EMV, replacing the traditional magnetic striped card security technology with a card housing a computer chip.
“The retailer response, however, has been shockingly muted by comparison,” notes Comoreanu.
The Cardhub study polled 55 major retailers and 1,000 consumers regarding EMV compliance efforts. According to the Cardhub study, some major retailers have taken the EMV compliance route. Walmart, Target, Home Depot, Walgreens and CVS Caremark were 100 percent compliant as of this month. Kroger and Lowes are at 93 percent in achieving compliance. While Costco completed an upgrade in 2015, just 13 percent of its stores are compliant as of this month.
On the consumer side, 56 percent of card users polled don’t care if a retailer’s payment terminal is chip-enabled, 4 percent stated they will not shop at a retailer that hasn’t upgraded card terminal security and 41 percent don’t have chip-enabled cards.
The EMV compliance issue is just one of several payment challenges facing retailers today. Payment security is a top focus given increasing data breaches and the fact that retailers are now responsible for fraudulent card activity – a financial risk that previously fell on card issuers. Given the tight margins most retailers wrangle with, the opportunity to prevent additional costs is invaluable.
The EMV transition in the U.S. will be one of many topics at the three-day at the CONNECT Mobile Innovation Summit, which takes place August 15-17 in Chicago. Panel discussions will focus on areas such as biometrics and mobile ordering and mobile checkout. Find out more about CONNECT and these sessions.