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Bankers fear blame for EMV chip transition

Published: April 1, 2015
Bankers are worried about retailers not converting their point-of-sale systems to support EMV-chip cards, according to a Mar. 29 report by American Banker.

 

“I don’t want to see headlines saying ‘Big Bad Bank Put Mom’s Pizza Shop Out of Business,’” says David Pollino, senior vice president and enterprise fraud prevention officer at Bank of the West in San Francisco. “But it’s coming if merchants don't take it seriously.”

 

After Oct. 1, 2015, any retailer that can’t support EMV chip cards will be liable for the cost of card fraud unless the bank has not upgraded the victim’s card. But many merchants don’t know this: A study by Aite Group estimates one third of small business owners are not aware of the new fraud-resistant cards or that new POS equipment will be required to support them. Other retailers are willing to take their chances on fraud exposure versus the expense of installing the new systems.

 

In addition to small businesses, members of the Merchant Advisory Group—which represents 85 percent of America’s largest retailer chains—are resisting the EMVs. The vice president of MAG, Liz Garner, says “Even if the merchants had specs in hand right now, there’s no way to get everybody on speed, certified and go live by October.”

 

To make everyone’s anxiety complete, card companies are behind on EMV verification standards and card-issuing banks will miss the Oct. 1 deadline for almost half of their customers.

 

Still, 86 percent of large U.S. stores and 59 percent of all U.S. POS locations are expected to be able to handle EMV cards by the end of 2015, according to Aite.

 

For more about EMV cards and the need for new card readers in your store, see our story “Get ready for the chip” in the February 2015 Model Retailer.