EMV seems like the problem that won’t go away for both merchants and customers alike. Now in its second year of transition, the grand chip card undertaking has made progress, but as the following article reports, more improvements can further speed up the POS transaction process.
It has been more than a year since the October 2015 fraud liability shift date and the EMV migration began in the U.S. market. Merchants, acquirers, brand networks and issuers are all involved in this transition. It seems, however, that the most important stakeholder in the process was least represented — the cardholders. There is a perception that EMV transaction speeds are much slower than the mag stripe. This noticeable difference in transaction speed has led to customer complaints about chip payments and could potentially lead to long lines at stores.
Consumer dissatisfaction is one of the reasons less than 50% of U.S. card-accepting merchants have transitioned their terminals to EMV. Additionally, merchants that are EMV-ready are likely experiencing slowdowns in their speed-of-service. There is a clear need among retailers to determine how one’s POS solution performs versus comparable market vertical norms. Most importantly, there’s a need to understand what factors can affect the speed of EMV transactions, and find ways to optimize existing solutions to speed up chip transactions without jeopardizing transaction security.
In continuing the work around POS optimization best practices, UL recently initiated a study to identify trends in transaction speed at a variety of merchants across North America. The company, which has been closely tracking the global EMV migration shift and has been working on EMV POS optimization since 2002, evaluated transactions in different stages:
Card Insertion: Here a cardholder may select an application (Debit/Credit) and terminal POS may read records for transactions.
EMV Processing: Once the application is selected, this stage includes risk management for both the card and terminal, which is a conversation that occurs to assess processing conditions to be considered for the transaction.
Online Authorizations: This stage includes security protocols in requests and responses to and from the host as well issuer updates. For the purposes of this article, the following recommendations are applicable to the U.S. as it is an online-only market.
In 2016, the credit card networks made software tweaks to speed up the POS transaction time. While this has helped, the dip and wait time at the checkout terminal seems to be the main issue. It creates dead time when everything seemingly stops. Previously, the cashier was occupied at the register, and the cardholder was fumbling to put the card back into their wallet. EMV dip and wait may still not be that long, but seconds count in grocery or big box store checkout lines. Too bad most merchants have not converted to NFC contactless payments, as that would eliminate most of the EMV waiting game.
Overview by Raymond Pucci, Associate Director, Research Services Advisory Service at Mercator Advisory Group
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