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I read with interest PG contributor John Karolefski’s recent column, “Not Enough POS Terminals Ready for EMV Cards,” and I felt it was important to give the independent grocers perspective on the EMV transition.
John notes in his column, “Such new technology (EMV) is wonderful because it protects consumer data better than a card with a magnetic strip.”
While some may feel that EMV technology is more secure for consumers, the reality is the chip has one main purpose, and that is to validate the authenticity of the card at the point of purchase, making it more difficult to counterfeit the card. Unfortunately, the vast majority of EMV credit cards being issued by banks in the United States are being issued without PINs, which begs the question: Why go to all the expense to issue EMV cards without adding a simple PIN authentication as well?
Many independent supermarkets are investing in advanced technology such as tokenization and end to end encryption to further protect the consumer’s data from the swipe on through the transaction processing. And some are even making further investments to protect consumer data with products such as First Data’s TransArmor Solution—the same technology that secures Apple Pay—to offer an added layer of security.
Regarding the implementation of EMV, not a day goes by that I don’t hear from NGA members who are beyond frustrated with the slow pace of EMV implementation. To be clear, the vast majority of NGA’s members – from single store operators to regional chains – have invested tens of thousands of dollars in new hardware and software well before the October 1 shift, only to be left waiting on a massive backlog in the certification process which is controlled by the card networks.
As an example, NGA has one retail member who installed EMV capable hardware in their 70 plus stores well over a year before the October 1 deadline and yet they continue to wait on certifications so that they can begin accepting EMV cards. Meanwhile, these retailers are being hit with thousands of dollars in chargebacks from the banks and card networks simply because they are not “EMV compliant.”
We understand that the certification process, which is mandated by the card networks, has experienced a number of delays that range from the card networks’ late delivery of technical code to other complications slowing the certification process. None of these delays are the fault of merchants, yet it’s the merchant who is facing an onslaught in new chargebacks as well as confusion among consumers who don’t understand why they can’t use their chip cards at their local supermarket.
Merchants who have made the investment to comply with the October 1 deadline should be given a “safe harbor” and shielded from EMV specific chargebacks. It’s time for the card networks and banks to stop passing the buck onto the backs of merchants, but rather they should work together with merchants to further eliminate fraud by issuing credit cards with PINs, work to speed up the EMV certification process, and put a hold on chargebacks.