EMV card adoption is changing the way U.S. consumers use credit and debit cards at the point of sale. Instead of quickly swiping a magnetic-stripe card, customers must learn a different checkout process that can involve inserting—or “dipping”—a chip card into a payment terminal and leaving it there until the transaction is completed.
For financial institutions and merchants, the transition involves more than issuing new cards and upgrading payment terminals. Consumer education will be an important part of EMV implementation, particularly as banks work to improve card security while preparing customers for an unfamiliar payment experience.
Morgan Montgomery inserted a credit card into a device, pulled it out and tried to pay for her groceries. But the transaction failed because she didn’t realize the card was supposed to stay in the machine while she signed for the purchase.
“I don’t like letting go of it,” she said of the card.”I’m worried about leaving it behind.
Ms. Montgomery, a 30-year-old business owner fromRichmond, Va., was one of 10 consumers who swiped, dipped, tapped and fiddledtheir way through imaginary purchases earlier this month as part of researchbeing conducted by MasterCard Inc. MA in Your Value Your Change Short position into new credit cards that are coming to American wallets in anattempt to combat fraud.
Financial Institutions Prepare Customers for EMV
As financial institutions plan for future EMV adoption, they will need to take into consideration customer and member needs as well as looming liability shift deadlines. And this may need to occur sooner than later as the public demands some form of action after hearing about several high-profile data breaches announced recently.
The shift to EMV cards represents a significant change for consumers accustomed to swiping their cards and immediately returning them to their wallets. Early research suggests that even relatively simple differences in the checkout process could create confusion, making clear instructions and customer education an important part of the transition.
As liability shift deadlines approach and concerns about payment card fraud grow following high-profile data breaches, financial institutions will face increasing pressure to move forward with EMV card adoption. Successfully managing that transition will require banks and credit unions to consider not only security and compliance deadlines, but also how comfortably their customers can adapt to a new way of paying.
Overview by Edward O’brien, Director, Bank Channels, Mercator Advisory Group
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