Are You Ready for EMV Adoption?


There is less than one month to go until the official deadline for EMV adoption in the U.S. By Oct. 1, 2015, all payment terminals in stores are supposed to be able to process the new smart cards with an embedded chip. EMV is an acronym for Europay, MasterCard and Visa.

The change is part of a global transition from magnetic-stripe to chip technology to improve security during credit and debit card transactions. It aims to prevent fraud that is done by cloning the data on mag-stripe cards. Europe is way ahead of the United States in this transition. About 40 percent of the world’s cards and 70 percent of the terminals deployed outside the U.S. are reportedly EMV-compliant today.

What does the deadline mean for grocers? Basically it means a shift in liability. After Oct. 1, food retailers not equipped with the latest chip technology in their payment terminals will be liable for the cost of all fraudulent card transactions. In other words, retailers using non-EMV compliant payment terminals that accept transactions made with EMV cards will be held accountable. Smart cards will bear both a chip and mag-stripe.

While there are no national statistics available, anecdotally I hear that most grocery retailers have been working diligently on migrating their payment terminals to EMV. But they are reliant on vendors and software companies to provide equipment and updates. There have been long lines, which cause delays.  

Payment officials at the Food Marketing Institute say there is no way that all payment terminals in all grocery stores will be compliant by Oct. 1. And work on the ones that aren’t may be shifted to the first quarter or second quarter of 2016. That’s because it would be impractical to make such a fundamental change in point-of-sale systems during the busy fourth quarter holiday shopping period. 

In March, FMI contacted the networks and informed them of the long lines for new equipment and software. They explained that the Oct. 1 deadline would come at the worst time – the start of the holiday shopping season. Perhaps the deadline could be pushed back? The networks declined to do so.  

The U.S. – a marketplace with more merchants and payment terminals than anywhere else in the world – was given three years for the transition. Canada was given a 10-year rollout period.    

So, let’s summarize: the Oct. 1 deadline was established in spite of the impending holiday shopping season; the U.S. was given shorter transition time than our much smaller neighbor to the north; and long lines for getting equipment and software to grocers was delaying the transition.  

Maybe an extension will be granted on Sept. 30. Hope so. 

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