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Written by Cyndie Martini
on March 29, 2016

Last year many businesses were told they needed to upgrade their payment terminals to accept EMV transactions. As the Oct. 1 deadline came nearer, few merchants had actually made the switch. According to BAI, as of January, fewer than 4 percent of businesses had upgraded.

One potential reason a large number of retailers are taking their time to make the switch is the disapproval largely coming from consumers. Some consumers find the payment process with the new terminals to be slow and confusing.

The chip card is inserted into a slot near the bottom of the terminal whereas most consumers are more familiar with simply swiping their card through the card reader that appears on the right hand side of the POS system, thereby causing a certain level of confusion at the register. Consumers' first reaction is to make the insertion quick, withdrawing the card almost immediately, but instead, EMV terminals require the card to be kept in for several seconds before the payment is processed. Plus, the process is not consistent between stores. Some terminals will beep when a payment is processed; others blink and some don't signal the finalization at all, relying on the cashier to make a verbal confirmation.

A new method emerges
While EMV made its slow integration in the U.S. over the past few years, another alternative payment form was beginning to take hold as well: mobile payments. Mobile Payments Today pointed out there have been several obstacles that held mobile payments back from being widely accepted right away. At first, it was the lack of retailers equipped to accept mobile payments. Additionally, the limited number of smartphones that supported the payment type also held the general population from adopting it.

However, neither of these roadblocks is much of an issue anymore. Between Apple Pay, Samsung Pay and Android Pay, virtually every smartphone offers its user a mobile wallet option. Near field communication technology, which allows for contactless payments, can be found in most smartphones as well as in most of the EMV-enabled terminals retailers now have.

Benefits of mobile pay
The benefit most consumers are likely to notice is the time it takes to process the payment. Gregory Burch, the vice president of strategic initiatives at Ingenico Group, explained to Mobile Payments Today that this could be especially conducive to the customer experience in stores and restaurants that encourage quick shopping or ordering and quick payments. He stressed that, when a customer wants to leave, he or she doesn't want to wait for a complicated and lengthy payment process to be completed first.

"When customers have their good and they're ready to leave, they're ready to leave," Burch said. "All of our customers want the payments experience to be as seamless as possible and the scenario you're painting really allows those who have contactless to have a seamless experience and potentially have it streamlined."

In addition to the payment process being more convenient, mobile payments may actually be more secure than EMV transactions, if not at least on par. As Time pointed out, some of the biggest advantages to using Apple Pay, Android Pay and Samsung Pay is that the retailer doesn't wind up storinga consumer's credit card information, making it unlikely that anyone can steal it.

BAI reported additional advantages are beginning to emerge as well. Some agencies have argued that EMV transactions should be completed only after a PIN is entered. While this may improve the security of this payment method, some consumers may disapprove of the added step. Meanwhile, authentication in mobile payments is quickly turning to biometrics like fingerprints and facial recognition, which are not only more secure, but also faster.

As more retailers begin to search for a better payment method, credit unions should work alongside them to introduce alternative options. By ensuring all business members are aware of the options available to them, credit unions will not only be able to improve their members' businesses, but also strengthen their relationships with their members.


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