Many Small Merchants Not Ready for EMV Migration
Starting Oct. 1, all banks are required to be issuing EMV-compliant cards and retailers must have the technology to accept them. About 70 percent of credit cards will have chips in them, but most of these cards will be chip-and-signature cards, not chip-and-PIN. Some criticize banks' adoption of chip-and-signature because the signatures are useless against fraud, but Visa insists the chip alone helps eliminate the vast majority of fraud and the chip-and-signature system enabled those cards to be deployed as fast as possible. However, only 20 to 30 percent of merchants have purchased and deployed the EMV-capable point-of-sale terminals and software they will need to handle EMV chip cards. "A big portion is because the merchants don't understand the risk associated with this," says 1st Mariner Bank's Wade Barnes. EMV holdouts will be fraud targets, and industry experts fear small merchants who have not adopted EMV and the banks and card providers that have resisted the transition will be among the victims. Barnes says the shift to EMV should result in a gradual reduction in card fraud over the next 12 to 18 months.
From "Countdown to the EMV Deadline: Who's Ready, Who's Not"
American Banker (09/28/15) Crosman, Penny