On October 1, the long-awaited EMV liability shift took effect nationwide, putting full financial responsibility on all retailers to meet industry payment technology standards. Businesses that have not yet made the upgrade to EMV-enabled payments systems now risk having to pay large expenses in the event of a security breach.
Leading up to the deadline, many retailers questioned the benefits of investing time and money into ensuring EMV compliance. With that in mind, the question remains: Are these retailers taking too much of a risk?
Below, the RTP editorial staff shares its perspectives on the deadline, and whether retailers and financial institutions alike have made the necessary preparations for it.
Debbie Hauss, Editor-In-Chief:
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The retail industry has been anticipating the EMV deadline for some time now, but many industry executives still need some education on the topic, including related technologies and long-term ramifications. Based on discussions with many industry experts over the past few years, I think the largest retailers with the highest average purchase amounts are at the greatest risk and should be sure to enable all stores with EMV capabilities as soon as possible. The smallest retailers, and those with low average purchase amounts, are at the least risk and may not need to rush into EMV enablement.
Alicia Fiorletta, Content Strategist: What I find really interesting is the significant gap between our coverage of EMV and how retailers and financial institutions are keeping pace. It feels like we’ve been covering payment technology and data breaches for years, and yet retailers and banks still don’t seem to have a sense of urgency. I still haven’t received updated credit cards from all companies, and I was just at a J. Crew, and the associate was saying that their technology was going to be updated within a few weeks. Hopefully progress will continue and there won’t be any breaches or security issues as we head into the holiday season.
Rob Fee, Managing Editor:
It does not seem to me that anyone in the U.S. was ready for EMV on October 1. I made a few shopping trips in the days following the deadline, and not one cashier blinked when I swiped my card rather than inserted it into a chip reader. Many shoppers, myself included, are still waiting for new cards from their banks and credit card providers, and plenty of retailers have not complied with the deadline. There are even questions concerning the value of the spend associated with upgrading POS terminals. After all, retailers with a few stores do not have same exposure to risk as big box stores. I expect that although EMV payments eventually will become standard practice, it won’t (and didn’t) happen overnight.
Adam Blair, Executive Editor:
With any change as complex and far-reaching as the transition to EMV, it’s inevitable that there will be controversies over which party has done enough to prepare. Certainly financial institutions bear a large part of the responsibility for slow distribution of EMV chip cards to U.S. consumers. For retailers, particularly those that have not yet invested in EMV-capable POS technology, they now need to calculate their potential fraud losses against very real costs for upgrading their systems. One thing to keep in mind is that criminals always seek out the easiest, least protected targets. Therefore, as EMV acceptance accelerates throughout the retail and hospitality industries, it will pay for businesses to make sure they are not among the last ones to hop on the more secure EMV bandwagon.
Glenn Taylor, Associate Editor: While the October 1 liability shift deadline has been common knowledge in the retail industry for far longer than a year now, I think retailers should have been given a longer time to fulfill the EMV quota. Smaller businesses, in particular, will be heavily affected by this, especially with some terminals ranging up to $1000. While a big box retailer should have less of a problem taking that hit for an upgrade, SMBs aren’t always as fortunate given their budgets. In addition, with Visa reportedly enabling only 18% of its cards with the EMV chip as of July, the entire operation from the retail and financial sides has felt less thought out and more rushed.
Kim Zimmerman, Managing Editor, Demand Gen Report:
I’ve shopped a few times at Target recently and had to use the new technology. It doesn’t seem as if the cashiers have been trained on how to use it or explain it to customers. It seemed a bit slow and clunky, and with so much advance notice I would have thought the big box retailers would have had a better handle on it.