Even though EMV payments are commonplace in other parts of the world, adoption in the US is severely lagging. Payment processors have been required to support EMV transactions since April 2013. That means that we've had the ability to process chip & signature transactions in the US for two-and-a-half years now. That should have been enough time for merchants to meet the key deadline of October 1, 2015 for EMV's rollout. As of that date, any merchants who don't have the ability to take EMV payments will be liable for losses. That being said, it's simply astounding EMV adoption has taken so long.
EMV's roll-out for both merchants and card members has been depressingly slow. I've looked at a number of different surveys that show on October 1, 60% of credit cards issued in the US didn't have a chip in them. Even worse, 75% of debit cards don't have a chip. If you're one of the majority of cardholders unlucky enough to have an outdated card and you visit a merchant that's equipped to take an EMV transaction, liability is placed with the card issuer. Statistics also show people with an income greater than $75,000/year are twice as likely to have a card with a chip in it. It's clear card issuers are very discriminatory as to where they issue EMV chips. They want to get the biggest bang for their buck.
Does that mean cost is the factor slowing down EMV's roll-out? While there is a cost to replacing a card, most credit cards get recycled every three years anyway. The incremental cost of putting a chip in the card should be a matter of pennies. The associated costs are having the largest effect on smaller card issuers. The big banks are leading the charge right now (Bank of America, Chase, PNC, etc.). Smaller card issuers are probably looking to integrate EMV chip roll-out into their natural cycle of card refresh.
Look at every other country in the world—they're well ahead of the US market in terms of EMV payments. I'm just blown away by how stagnant the process has been. After two-and-a-half years of forewarning, most credit and debit cards are still behind the times. Card issuers are well aware merchants have begun to accept these types of transactions. You'd think any cards issued in the last 12 months would already have EMV capability in them. Unfortunately, that's simply not the case. Rather than already having 1/3 of cards automatically up to speed, everyone seems to be struggling to reach the level we're at now.
The US is clearly behind the pace of the rest of the world. We're finally seeing the move to EMV transactions with signature. Some issuers are now even offering the ability to get a PIN, which is nice. In places like Europe, Australia and New Zealand, though, you simply cannot make a transaction without EMV and a PIN. The devices just don't support older transaction methods. There's no place to swipe a mag-stripe card. They don't even have a printer to print the slip for you to sign. The process is fully electronic and the receipt is emailed to you.
We're seeing the US move to EMV transactions with signature. There's room for progress with PIN and contactless payments. The market need is clearly there and it's certainly already being accomplished in other markets around the world. This is the first of many hard but necessary steps for the US market to take.
