Despite the difficult transition to EMV in late 2015, many merchants and consumers have gotten the hang of the new payment method. In March, EMV reached a new milestone: Consumers completed 1 billion transactions with their chip-enabled Visa cards in March, according to data collected by Visa.
March 2017 transaction volume amounted to $49.1 billion. Compared to March 2016, this is a marked increase of $30.6 billion, or 165 percent. More than 420 million consumers now carry Visa-branded, chip-enabled cards in their wallets and purses, an increase of 164 percent compared to March 2016.
Merchants are encouraged to switch after liability shift
As the October 2015 deadline approached, many merchants chose not to upgrade their payment terminals. Some thought the price tag on the new tech was too high, while others weren't convinced of the benefits, and other reasons kept adoption rates low.
This quickly changed once liability shifted from card companies to merchants, Digital Transactions reported.
"Once the EMV shift began and fraud chargebacks began showing up on their monthly bank statements, they took notice almost immediately," Michael Moeser, the director of the payments practice at Javelin Strategy & Research, told Digital Transactions.
Immediately following the 2015 liability shift, many retailers began to see a rise in fraudulent activity. In the final quarter of 2015, which is when the liability shift took place, chargeback rates for merchants increased 30.9 percent, according to The Strawhecker Group. This was a notable leap from the 0.5 percent increase observed during the fourth quarter of 2014.
Additionally, the chargeback dollar volume amount saw a major increase. In the last quarter of 2014, merchants actually saw a decrease of 6.2 percent in this statistic, but an increase of 15 percent after the liability shift went into effect.
The cost to upgrade has made many merchants hesitant. In some instances, it may cost a few hundred dollars. However, CreditCards.com pointed out that the cost of fraud may outweigh the price of the update.
"The magnitude can be so great for small businesses," explained Gregg Smith, the North American sales manager for the global payment processing company Cardtek. "If a small store that does $2,500 a month in sales then has to pay about $900 for fraud that same month because they were found liable, that could be really tough."
Additionally, the success that EMV-compliant merchants have seen is likely impressive enough to sway those retailers who are still stalling. For those who made the switch, counterfeit fraud dollars dropped 58 percent year-over-year in December 2016.
Changes to EMV affect consumer adoption
The EMV payment process has sped up, resulting in more consumers appreciating the security measure, according to CIO.
"One of the biggest complaints off the bat was that EMV was too slow, taking 10-15 seconds," Perry Kramer, vice president and practice lead at Boston Retail Partners, said according to CIO. "Now the EMV transactions have really gone back to the same speed as what it used to be with swipe transaction — from the consumer point of view, it has sped up dramatically."
Visa's Quick Chip program is one way merchants can speed up transactions through their payment terminals, Digital Transactions reported. This technology is now being used at more than 35,000 locations, giving many storefronts across the country the ability to process EMV transactions quickly and smoothly.
Consumers are also more aware of the benefits of EMV. One Visa survey found that 35 percent of respondents believed that chip-enabled cards are the safest way to pay.
While adoption of EMV has made significant progress since October 2015, there are still improvements to be made. While an impressive 2 million-plus storefronts accept EMV payments, more than half still haven't made the move, according to Visa.
For those credit unions who have business members who have yet to make the change, a little nudge might go a long way. Explain to your members the benefits, and show them the data: fraud is more likely to occur at merchants who haven't switched, and it is costly. Plus, consumer sentiment has greatly changed: With more people noticing the quick transaction and acknowledging the security benefits, adopting EMV is certainly a positive move.
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