Credit Card Industry Holds Up the Chip Card Rollout, NRF Says

A Third of U.S. Merchants Now Comply with Chip Cards Acceptance, Says U.S. Payments Forum

Nearly a full year after the deadline to accept new chip-based credit cards, some retailers still can’t turn on their terminals to accept chip cards.

According to the National Retail Federation (NRF), it’s the credit card industry that is to blame. The reason for the delay? The terminals are not certified for EMV technology. And it’s the credit card industry that has to certify them.

What’s Behind the Chip Cards Rollout Delay?

“Most major retailers have done their part, but the card industry continues to drop the ball,” said NRF Senior Vice President and General Counsel Mallory Duncan in a press release making the announcement. “Retailers have spent billions of dollars to install the new equipment but card companies have failed to sign off on the installations in a timely manner. Many retailers have had new chip card readers sitting next to their cash registers for a year waiting for the card companies’ blessing. We wish they cared as much about security as we do.”

“This is frustrating for retailers and confusing for consumers,” Duncan said. “Worst of all, the new cards provide just a fraction of the security they could because they are only chip-and-signature rather than the chip-and-PIN used throughout the rest of the industrialized world. Without a secret PIN, virtually any illegible scrawl of a signature is good enough for a criminal to use an innocent person’s credit card with or without a chip.”

As of the target date for conversion October 2015, 57 percent of NRF members say they had already installed the EMV equipment but were waiting for certification by the card industry so they could turn it on. That’s according to a recent NRF survey on the subject. And 60 percent of those who had already installed the equipment said they had been waiting six months or longer for the industry’s certification.

Of those who do not yet have EMV installed, 86 percent said they plan to have the new Europay MasterCard Visa chip card technology fully implemented by the end of 2016, the NRF reports.

Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs — 42 million working Americans, added NRF. The industry contributes $2.6 trillion to annual GDP and is a daily barometer for the nation’s economy. Certification would entail the EMV systems being tested to ensure they are working properly with all of the major cards, including Visa, MasterCard, American Express and Discover.

But for now it seems it’s up to the credit card industry to take the next step to make this a reality.

Chip Card Machine Photo via Shutterstock

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David William David William is a Staff Writer for Small Business Trends. He covers franchises, brick and mortar businesses, public policy and other small business issues. He is also founding editor of WebWriterSpotlight.

One Reaction
  1. I’m still amazed at how many stores where I see a little paper inserted into the chip reader slot that says to slide your card. The retailer is ready, but the tech isn’t ready. Just ridiculous.