Written by Robert McCarthy, Product Manager, Merchant Warehouse
Tuesday, 17 July 2012 07:25
EMV is emerging in many countries as a new standard for payment transactions. EMV is defined by EMVCo as, “a global standard for credit and debit payment cards based on chip card technology.” According to EMVCo, there are an estimated 1.5 billion EMV cards worldwide and 21 million EMV terminals. However, the United States is still slow to adopt this technology because of the joint retailer and customer fear, uncertainty and doubt. With EMV expected to hit the U.S. in 2013, retailers must be educated on the technology and how it will affect the point of sale (POS), customer engagement, security and retailer data.
How consumers pay for products on a day to day basis is starting to evolve. Prior to EMV, consumers used cash or credit/debit cards. This process allowed the retailer to be intimately involved in the point of sale transaction. With the introduction of EMV, this process is going to break apart. With EMV, transactions include a separate terminal and require the customer to engage, instead of the retailer, at the point of sale. This article will provide four facts retailers need to know about EMV for its incoming implementation.
EMV Will Improve Retail Security At The POS
Retailers are cautious to implement EMV. They don’t know what will happen if they do implement it and vice versa. If they do implement it, will their liability change? Despite all the concerns, EMV is extremely secure and customer data is protected. By maintaining static data, the industry has left itself open to repeated cyber attacks and has forced solutions providers to take responsibility in a field outside of their traditional sphere of knowledge. Luckily, a move to EMV and chip and pin will alleviate many of these concerns. EMV’s key to improving security in the coming years is the capability to remove retailers from the security equation by providing a consistently updated service that silos payments — leaving merchants to focus solely on their customers’ experience.
EMV Data Changes With Every Swipe
When customers are at the check-out counter they don’t even give a second thought to handing over their card to a complete stranger. Customers have become so accustomed to this process that the thought doesn’t cross their minds that the card handler has their personal information available to copy or use at a future point in time. Also, their personal data is being sent through the device and then travels through to other companies and handlers to complete the transaction. EMV still requires encryption, but chip technology provides a more secure option, limiting the scope of the data transfer and shifting the engagement paradigm. With EMV, the transaction is simply between a customer and the device. There is no human interaction or third party companies that are interacting with their data, reducing the scope and holes that open retailers to fraud cases.
EMV Enables Retailers To Employ A Secure Customer Experience
Retailers are experiencing a tremendous amount of disruption in this space especially with mobile. According to the Interactive Advertising Bureau, 73 percent of smartphone users say they have used their mobile phone in a store. Consumers are now conducting mobile research to find competitive prices or if retailers carry mobile loyalty and reward programs. By understanding this trend, retailers can embrace mobile by evolving transactions beyond a card swipe. Customer engagement has become a top priority and retailers must think about loyalty and rewards, coupons, mobile offers and real-time offers to allow themselves to provide an immediate up sell as a customer is checking out. To survive this new payment disruption, retailers must employ a strategy that allows them to choose a mobile payment plan that is best for their customers’ needs. Allowing customers to choose their preference provides retailers a way to engage with their customer and learn more about them. Increased engagement directly affects the increase in retention and brand loyalty. EMV technology works in the background to make these mobile payments secure and provides merchants with a new level of customer visibility.
EMV Brings Big Customer Data To Retailers
Big data is a hot topic at the moment and researchers don’t see it slowing down anytime soon. IDC estimates that by 2020, the total amount of electronically stored data will reach 35 trillion gigabytes.
With the rise of mobile payments, this data is much easier to gather. Retailers must learn to leverage the data already being collected. Retailers can use this big data to market to their audience and find out crucial stats about their customers such as when they are buying, how often they are buying and what they are buying, etc. The biggest value in EMV, both for retailers and consumers, is getting to the next level of retail/consumer relationships. This data will help businesses better understand their consumers and, therefore, provide them with a level of service that was not previously available.
Disruption in the payments industry is growing rapidly and EMV is a great contributor to these changes. EMV is changing the point of sale, customer engagement, security and how retailers use data. EMV affects how consumers use cards, how devices process customer data and the handling process. How will you fit EMV into your business?
As product manager for Merchant Warehouse, Robert McCarthy leads the design, development and implementation of new product offerings and solution sets and serves as a key contributor in go-to-market strategies. He also acts as a liaison for application and development partners and is a key thought leader within the company. McCarthy brings more than 18 years of experience to his role, over a decade of which was spent in the mobile industry. Prior to joining Merchant Warehouse, he held the position of senior solutions architect for uReach Technologies, where he was responsible for leading research, design and development to expand the company’s mobile solutions portfolio. McCarthy’s experience also includes director level leadership engineering roles with LiveWire Mobile, NMS Communications, SavaJe Technologies and Openera Technologies.