Credit Scores and Reports

Overcoming 5 merchant barriers to EMV chip cards


What to do if your business hasn’t become EMV-ready because of costs, certification delays and consumer complaints

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

 Overcoming obstacles to EMV chip-card acceptance at your small business Westend61/Brand X Pictures/Getty Images

More than six months have passed since the industry deadline passed for merchants to start accepting EMV chip credit cards, but anyone who’s bought something in a store knows that most merchants still haven’t made the shift. To blame: procrastination, a lack of education among small-business owners, and an inadequate supply of equipment and personnel from acquirers and issuers to assist in the transition.

A January 2016merchant survey by payment consulting firm The Strawhecker Group found that only half of retailers expected to have made the switch to EMV-compliant systems by June of this year, and more than a quarter didn’t anticipate doing so by the end of the year. Since Oct. 1, 2015, merchants that have not enabled EMV card readers have been liable for fraudulent credit and debit card transactions that take place via a swiped EMV card. (Self-service gas pumps have until Oct. 1, 2017, to become EMV-compliant).

If a customer doesn’t have a chip-enabled card and fraud occurs, the card issuer – not the merchant – will still cover the loss. But that situation is going to become more rare. There will be more than 617 million new EMV cards in the hands of consumers by the end of this year, and they’ll comprise 98 percent of cards issued by the end of 2017, according to payment technology firm FirstData.

The “liability shift” was announced in August 2011, and while there have been some gripes about the pace of the shift, it’s happening relatively swiftly, “considering that we are the largest and most fragmented card market to ever go down this path,” says Julie Conroy, research director for the Aite Group, who has studied EMV migration in other countries.

Read on for five of the biggest obstacles standing in the way of small-business adoption of EMV – and tips on how entrepreneurs can overcome them.

    1. You’re worried about the cost. Depending on the size of your business and how high-tech your current payment processing system is, the cost of switching to newer equipment ranges from a few hundred to a few thousand dollars per machine. That can get expensive for small retailers with multiple points of sale.

      Keep your costs down by shopping around among different vendors and considering whether you can streamline your current processing system. You’ll want to compare both the upfront costs as well as the ongoing maintenance fees when comparing vendors. If you’ve purchased your terminals within the past few years, they may already have the capability to read chip cards. If that’s the case, you may just need a software upgrade.

    2. Your equipment hasn’t been certified. Some retailers who’ve already updated their software and terminals say that they’re unable to start accepting chip cards because the required certifications by both the payment processor/acquirer and the card brands are slow in coming. The issue has become so heated that two merchants in Florida have filed a class-action lawsuit against a few card issuers as well as the major card networks – Visa, MasterCard, Discover and American Express — for enforcing the liability shift without providing prompt certification.

      To some extent, you’re just at the mercy of that backlog

      \u2014 Tim Francis
      Travelers Insurance

      Certification has been taking so long because vendors just don’t have the manpower to keep up with the glut of requests from retailers trying to meet the requirements of the new rules. If you have not yet bought EMV-compliant readers, or are shopping around for a new credit card processor, ask first when the processor will be able to certify the equipment. If there’s a significant delay, it may be worth looking for another processor or holding off on installing (and paying for) the equipment until it can be certified.

      But keep in mind that if you haven’t gotten the ball rolling yet on certification, you’ll likely face at least some delay. “To some extent, you’re just at the mercy of that backlog,” says Tim Francis, enterprise cyber lead at Travelers Insurance, which sells cybersecurity insurance to companies.


    1. You haven’t trained your staff. Any change to your point-of-sale system will require you to educate your employees (and yourself) on best practices for using it. Depending on your culture and the size of your business, that may require a staff meeting or it might just take you setting aside some time with each worker to explain the new processes.

You’ll want to cover how to run purchases, how to handle returns and offer a script for coaching confused customers. “Training is an important part of the transition that needs to be built into the upgrade plan and coordinated ahead of time,” says Randy Vanderhoof, director of the EMV Migration Forum.

If you’re uncomfortable doing the training yourself, or if you’re not sure of the best practices, see if your vendor offers free materials or will run a training session for you.

    1. You’re worried customers won’t like it. Early adopting consumers were irritated to find that EMV purchases seem to take longer to process than mag-stripe transactions.

      The procedure is going to become more familiar to consumers, and five years from now no one will give it a second thought.

      \u2014 J. Craig Shearman
      National Retail Federation

      As the cards become more common, however, and more stores start accepting them, consumers have become more accepting as well. Nearly 60 percent of consumers who use smart chip cards now have no complaints about them, according to a March survey.

That number’s likely to grow as the payment experience gets more ubiquitous. “The procedure is going to become more familiar to consumers, and five years from now no one will give it a second thought,” says National Retail Federation spokesman J. Craig Shearman.

In the meantime, educate yourself on the security benefits of chip cards so that you can explain to employees why you’ve made the switch. Widely used in Europe and Canada, chip cards offer a higher level of security against counterfeiting than those with magnetic stripes because the chip creates a unique code for each transaction.

As for slower transaction time, relief may be on the way. Both Visa and MasterCard have announced new technology that will speed up the checkout process. Visa has promised to make the technology available for free to processors who can then decide whether to charge merchants a fee for using it. Visa says the new software will not require merchants to get recertified.

    1. You think your risk is low. The biggest reason to transition to EMV is to lower your risk of being held liable for fraudulent charges, but the scope of this risk differs depending on the number and size of transactions you complete and your location.

For lower-risk merchants, the cost of fraud may not outweigh the cost of upgrading your system enough to warrant rushing into a payments overhaul. “If you’re in the restaurant industry where you don’t see a lot of fraudulent activity, there may be less incentive to shift to EMV than if you’re a jeweler or an electronics store,” says Jared Drieling, business intelligence manager for The Strawhecker Group. “They may already be starting to feel the burn from the additional liability.”

Still, EMV is on its way to becoming the standard, so it’s worth putting an upgrade on your to-do list. After all, once the larger retailers start bulking up their security measures, fraudsters may start targeting smaller businesses as the weakest link when it comes to payment processing. From the fourth quarter of 2014 to the fourth quarter 2015, counterfeit fraud at the top five chip-enabled merchants declined by nearly 20 percent, according to Visa.

Start researching your options now to get a sense of the pricing and systems available to your business. Use the opportunity to update your entire point-of-sale system to accept not only chip cards but also mobile payments, which comprise a growing portion of transactions. In the meantime, be sure to take as many security measures as possible to lower your exposure.

See related: EMV terminal recommendations for small business, EMV chip card rollout in US to peak in 2016EMV chip card tales from cashiers at the front line

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Credit Scores and Reports

Consumers’ rights to accurate credit reports get boost

Consumer advocates buoyed by a Congressional proposal to make the credit reporting system fairer and a Supreme Court decision upholding right to accurate information reporting

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more