The US may not complete the migration from magnetic-stripe cards to EMV chip cards until 2018 even though the EMV liability shift deadline for merchants and issuers arrives in 18 months, according to a new Javelin Strategy & Research report which suggests that
the US EMV adoption will faces hurdles.
Javelin analyst Nick Holland says a lack of coordination concerning what EMV standard will be used, insufficient merchant and consumer education on why this transition is taking place, and prohibitive costs for deploying new point-of-sale terminals and cards is slowing the migration process.
Holland thinks big box merchants will most readily embrace EMV terminals to avoid the bad publicity that other retailers suffered due to recent data breaches. Still, he says a sizable portion of small and micro-businesses, which comprise 58% of US retail establishments, will likely not be EMV-ready by the 2015 benchmark because of limited or no knowledge of EMV or the approaching liability shift.
The lack of consumer awareness also is a hurdle, with Holland noting “if consumers aren’t trained to use [EMV] cards, you will have significant lag times in checkouts.” He suggests the US card payment industry set a timeline for phasing out the magnetic stripe from cards.