Card network also says large-scale chip-enabled merchants have seen 18% drop in fraud.
Those seconds mean something. In 2014, Ars argued that the inconvenience of a few extra seconds caused by dipping a card in the terminal at a checkout stand would drive people to use mobile payments like Apple Pay and Android Pay more often. Those payment platforms rely on EMV’s Near Field Communication (NFC) standard, and transactions are much faster because of it. Although it's hard to say if such a shift in preference is occurring, especially with the uneven rollout of EMV-capable terminals, customers trying to use chip cards must dip them into a checkout terminal and leave them there while the transaction is being processed—a serious change of pace and potential source of frustration for Americans used to the speed of swiping a magnetic stripe card. That time barrier, as well as the fear that customers might be confused as to how to use a chip card, caused merchants to postpone upgrading their terminals to support the EMV standard over the holidays, traditionally the most important time for businesses. But magnetic stripe cards are very fraud-prone, and EMV cards are less so (although not entirely fraud-proof), so card networks are insisting that it’s time to make the change.
Visa says its new Quick Chip specification can be integrated into the very complicated system of payments processors, acquiring banks, and payment networks for free and with ease. The new specs now permit an EMV card to be dipped and withdrawn from a terminal before the transaction is finalized, “typically in two seconds or less,” a press release states.
"Quick Chip requires a payment application software update that can be easily downloaded to the payment terminal,” Visa says. "Once installed, the technology will work with all cardholder verification methods, including signature and PIN, and does not require the merchant to make any changes to its routing or transaction handling."
Despite the promise of Quick Chip, it seems it's a Visa-only specification at this time. But the company told financial tech blog Pymnts that Visa is open to letting other industry players incorporate the tech into their checkout processes. The company did not say if it would be free to other card networks to incorporate or not.
Currently, US card networks only require that credit card transactions are verified with a signature, leaving criminals an opportunity to steal physical credit cards and use them before the victim has a chance to cancel the card. While eventually a PIN may be required, for now the EMV rollout in the US primarily protects against stealing a card number from a merchant's terminal to create a new fraudulent credit card.
So is EMV working?
At the same time as Visa’s announcement about Quick Chip, Visa also released statistics (PDF) from its “top five chip-enabled merchants.” Those merchants reported that since they’ve made EMV terminals standard at their stores, they’ve experienced an 18.3 percent drop in fraud from 2014 to 2015.According to USA Today, which spoke to Visa’s vice president of risk products, Stephanie Ericksen, another group of five large merchants who had not upgraded their terminals to handle EMV cards saw fraud increase 11.4 percent.
Still though, convincing merchants to buy new terminals, educate their staff, and still maintain convenience for their customers is not a simple sell. In February, management consulting company The Strawhecker Group found in a survey that only 37 percent of US merchants were EMV-equipped.
Even those merchants that have purchased EMV-capable terminals are not always able to process chip-based payments. In March, a Florida-based supermarket chain sued MasterCard, Visa, and a host of card issuers, claiming that although the chain had EMV-capable hardware for a while, the hardware hadn’t been certified, leaving the chain liable for any fraud that occurred at its terminals.
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