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FridayReads – The EMV debate

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EMV has been a hot topic lately thanks in no great part to the US’s slow adoption of the new chip and pin standard, which has been used for over a decade in Europe. One of the key debates has been the change in liability shift last October which no doubt left a lot of retailers frustrated in the busiest shopping quarter. Here then we take a look at a selection of viewpoints on EMV; where it’s currently at, the problems retailers face, the frustrations of customers, and the security aspect too.

1. Not Enough POS Terminals Ready for EMV Cards, says John Karolefski

John bemoans that retailers have the machine upgrades in place but haven’t turned them on. Why? When others are utilising the new system and you come across someone who doesn’t, yet has it in place, it becomes an annoyance. Like Sainsbury’s still not having contactless payment options at the till point when practically everyone else does!

Read John’s article and feel his irritation!

2. National Grocer’s Association President Peter Larkin Shares His Views on EMV Transition, countering John Karolefski

Causing disruption to the business and its consumers is not an option, but it’s not that clear cut. Let’s not point the finger solely at the retailer. Many businesses have EMV terminals in place which are not yet activated, according to the National Grocer’s Association, and because of the back log of card networks’ late delivery of technical code as well as other complications, it’s slowing the certification process right down to a crawl. Who loses? Retailers and customers. Someone somewhere has the wherewithal to make it work a lot smoother, so why don’t they? Wouldn’t this benefit everyone?

Read what Peter Larkin has to say in response to John here.

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3. EMV Chip Credit and Debit Cards Will Not Eliminate Card Fraud
Okay, we’ve had a consumer and retailing association point of view. A lot is made of the case of fraud reduction, and I tend to agree that aspect, except that doesn’t mean getting complacent as the fraud simply shifts to another method. Goodbye skimming, hello online fraud. SmartMetric tells us that 18 months after introducing EMV in the UK it saw a 50% reduction in point of sale card fraud at retail yet saw a blow out increase in online and over the phone credit card fraud. This is like a lot of things, the problem doesn’t disappear, it simply moves to another platform.

Is this scaremongering? I think yes, in part. SmartMetric after all has a business to run, and products to sell. I think so long as customers are mindful of their shopping habits, how they use their cards, how security conscious they are, will provide good long term piece of mind. It’s not a perfect technology, but it’s a damn sight better than those old magnetic stripes.

Read the article.

4. Is EMV migration worth the cost?
Now we’re aware that EMV technology merely shifts fraud to other forms of attack. It’s a costly business this payments card business, but given the shear billions, nee trillions, that flow through these systems it’s got to be worth protecting, right? “Card-trapping” attacks rose by almost a fifth from the first six months of 2014 to the first six months of 2015, according to the European ATM Security Team (EAST). Download the ATMIA Global Fraud and Security.

Owen Wild, Security Marketing Director for NCR Security Solutions, gives us a balanced view. Read the article.

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5. EMV Liability Shift “Charge It All Back” Could Kill Small and Mid-Size Businesses
If, as a retailer, you’re still on the fence needing to be convinced that EMV adoption is a good thing, let’s take a look at where it’ll hurt you the most. Your bottom line. Chargeback fraud has been on the rise for some time and accounts for an estimated 86% of all chargebacks. Even so, once a chargeback is initiated, the transaction is usually reversed back to the retailer, plus an additional fee. Since chargebacks were created to protect consumers from things like fraud and services not rendered, the burden of proof typically falls on you, the store. If you choose to fight a chargeback, it can be difficult to win, especially in cases where proper procedures aren’t being followed. A recent report by the Kansas City Federal Reserve found that merchants only prevail in 20-30% of chargeback disputes.

Read the article.

At the end of the day, EMV is here to stay and alongside this we’ll continue to trial other payment forms like ApplePay. Our advice to you is to use your chipped cards as chipped cards as much as possible to avoid fraudulent transactions. Yes, time to memorise a new PIN (or start utilising smart phone payments!). Where you still see swipe stores, tell them you’d like to use EMV/chip & pin, make sure they get the message.

This isn’t just about retailers and banks, it’s about people. It’s about us. Isn’t it time we took more steps to increase payment security?

Want to know more about the short and long-term impacts of the U.S. migration to EMV? Alex Johnson, Director of the Credit Advisory Service at Mercator Advisory Group, will be leading a panel on the current state and future of EMV at the All Payments Expo in New Orleans, March 21–26, 2016. He wrote a piece titled EMV: the Good, the Bad, and the Unknown which you can find here.

If you’re a retailer you can go for free! Go to our main event/ticket site: All Payments Expo Event Website

Elliot Richards is a Digital Content Marketer and works for Informa plc in the Knowledge & Networking Division. His background is in retail, technology solutions, and ecommerce, spanning a wide array of organisations including HMV, Sega, Virgin, and Apple. Informa's Knowledge & Networking produces content-driven events and programmes that provide platforms for communities to connect and learn, equipping professionals with the capabilities and network they need to deliver enhanced performance. It is the world’s biggest events producer with several thousand events annually welcoming 150,000 delegates in over 70 countries.

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