In an effort to combat identity theft, financial fraud, and other related crimes, the US has begun moving towards the EMV chip system for credit card payments that Europe has had in place for nearly a decade. The new cards have already begun to replace old magnetic stripe cards, but the new regulations that have tagged along with them have left retailers and merchants frustrated.
With magnetic stripe cards, the responsibility for fraud has fallen to the issuing banks, a vast improvement over the days when consumers themselves had to fight bankruptcy and struggle to clear their good names and their good credit. But under the chip card system, it’s the merchants who are responsible for the loss if a card is used fraudulently, meaning they had to scramble to not only update all of their point-of-sale credit card readers–at their own cost–but also endure a lengthy wait to have those POS systems certified as compliant.
That was aggravating enough, but there’s a different reality to using a chip card: consumers simply aren’t used to it, either to the process of “dipping” the card (inserting it into the chip reader) instead of “swiping” it through the magnetic reader, or to the irritating delay brought on by waiting for the card reader to process the chip. One study by JDA Software Group found that the average dip time is eight to twelve seconds, a bizarrely long wait when customers are used to swiping and moving on. Whether out of habit or frustration, consumers who have chip cards are often still opting to swipe them instead of dip them, meaning merchants will foot the bill for any criminal activity.
Visa is now working on a software update that will address that, reducing the delay at the cash register to as little as two seconds. More importantly, though, is the lack of delay this will mean for merchants, who will not be required to recertify their dip POS systems.