Retailers are fuming. Banks are lagging. And customers are confused. The migration to mandatory EMV chip card usage at retailer POS terminals is in a bit of a shambles due to EMV certification delays.
Last October, all retailers that accept credit and debit payments were asked to upgrade their POS terminals to comply with the EMV standards. Along with the transition was a shift of liability from the card-issuing financial institution to the retailer, making business owners responsible for fraudulent charges that snuck through the high security system designed with multiple checks and balances.
Fast forward to today. Many retailers have yet to adopt the expensive upgrades. Not all payment processors have certified the systems. Business owners with half-working systems or who haven’t adopted the upgrades are stuck with unpaid credit transactions. And customers have cards in their wallets that they can only use at select merchants.
For example, the Morton Williams supermarket chain in New York has paid about $700,000 to upgrade POS terminals, according to the New York Times. But, they have yet to be certified, so they remain turned off, collecting dust. Meanwhile, the business owner monitors a growing stack of chargebacks from fraudulent credit and debit card purchases that will come out of the grocer’s bottom line.
First Data, one of the payment processors that certifies the EMV chip card readers, says about 20 percent of its 4 million merchants have been certified. But, what about the other 80 percent?
Some retailers are so upset, they’re filing anti-trust complaints. Although they’ve complied with the rules and upgraded their POS systems by the October 1, 2015 deadline and trained employees on the usage, they can’t use the technology because it hasn’t been certified by the payment processors. The merchants involved in the lawsuit feel the big banks conspired against small businesses to shift the budget of fraudulent chargebacks without giving merchants “meaningful recourse”.
There’s chatter in the financial industry community about offering temporary EMV-chip certifications as they work through the backlog. Some companies may even pony up the funds to take care of chargebacks incurred between October 2015 and today.
One thing to remember is that EMV chip card certification is a multi-tier process. It’s not as simple as activating a magnetic stripe card reader. Developers, system integrators and independent software vendors are working together to make sure the card issuers and card readers from various brands and sources can all work seamlessly on one unified system. That’s no simple task.
One thing is certain: There’s a lot of finger pointing surrounding the EMV certification delays.
Banks feels retailers took too long to upgrade their equipment, while financial institutions and payment processors take their time certifying the new terminals. After all, they no longer have the burden of making up lost funds due to fraudulent card usage, so what’s the hurry? Meanwhile, customers linger at checkouts wondering why their new cards won’t work in the chip reader slots.
Does your business still need to upgrade, but can’t afford the cost of buying new POS terminals? Accucode offers Hardware-as-a-Service (HAAS) rental POS terminals. Contact us today to find out how we can help your business during the EMV migration.