EMV: Consumer Acceptance of Chip Technology

EMV: Consumer Acceptance of Chip Technology

Payment options are continuing to grow. Go to checkout at any large, national chain and you have your choice to hand over cash, tap your phone or swipe your card.

Now (or in the very near future), financial institutions are sending updated cards to consumers. Cards that won’t need to be swiped, they’ll need to be inserted.

If you haven’t received your new card yet, you will soon. These new cards – with their intelligent microprocessors – are about to take over the retail industry.

That’s because Europay, MasterCard and Visa (EMV) is becoming the new standard globally for financial institutions and retail businesses when it comes to payments and self-service banking.

What does EMV mean to you, the consumer?

Well, it’s a new way of paying. And, like anything new being introduced that directly affects a large percentage of the population, there will be some grumbling, a bit of a learning curve and some confusion until it becomes the norm and everything is just business as usual.

I believe adoption to the EMV banking technology will be similar to how Apple changed their iPhone and iPad chargers. Remember back in 2012 when the tech giant unveiled a smaller proprietary connector for its devices? Being phased out was the wide-headed 30-pin connecter. Since 2003, the 30-pin connector worked seamlessly and now was being replaced? Consumers were up in arms thinking they had to adopt to a new way of charging their devices. “This is just a cash grab by Apple,” was said in more than one circle.

However, when the dust settled and the new charger was implemented, it turned out to be a better consumer experience – the connector was 80% smaller yet it was reversible and sturdier than the clunky 30-pin connector. It was quickly embraced and widely accepted as yet another smart modification that enhanced user experiences.

Change can be intimidating, especially with technology. And when that technology is tethered to your bank accounts, the fear factor can be elevated even further. However, the advantages of EMV far outweigh the minor change of user operation.

The Big Difference between EMV and Magnetic Stripe Data.

Going from a card swipe to card insertion with EMV makes a big difference when it comes to security. The microprocessors in the chip enable security features stronger than any security component possible on traditional magnetic stripe cards – saving you the worry and hassle that accompanies card fraud.

Prior to EMV, the magnetic stripe has been the main mechanism available for ATM or point-of-sale devices to obtain customer-specific information for a transaction. The magnetic stripe technology hasn’t changed much since it was introduced in the 1960s. There are security vulnerabilities with magnetic stripe technology that EMV significantly improves.

The Benefits of Chip Technology for Consumers.

The primary benefit for customers is a more secure transaction. Magnetic stripe data can be easily “skimmed” and duplicated by fraudsters. Chip technology allows for advanced communications between the card and reader to ensure the card is authentic. EMV technology primarily protects against “card in hand” fraud, which is fraud that occurs from duplicating cards.

Magnetic stripe data doesn’t change on the card and can be obtained via numerous methods from fraudsters, then duplicated very easily onto other cards. With EMV technology, a one-time secure session is created between the card and device for every transaction and it will never be the same.

Even if an EMV card was duplicated, it could not be used because of the sophisticated technology that creates a one-time only secure session for each use.

The Price of Patience.

Like I mentioned earlier, there will be a bit of a learning curve with the EMV rollout. I expect quite a lot of card swiping and confusion when it’s time to pay. However, be patient and be willing to wait just a little bit longer for the EMV chip to be properly scanned when inserted into point-of-sale devices.

What it comes down to is essentially what level of fraud risk you are willing to accept for convenience. Speed and performance are definitely factors for customer satisfaction but security benefits surpass any slight inconvenience. And the adoption rate of EMV is high globally, which is a good indication that consumers are willing to be a little more patient, if it means their transactions are more secure.

As adoption of EMV technology grows in countries that have most recently transitioned, like the U.S., the card reader technology and performance will likely improve – balancing security with transaction speed.

Going from stripe to chip may seem like a small change, but it’s going to provide you with a big advantage from fraudsters. Sure, EMV will bring about a change in consumer behavior – but believe me this is a change that’ll do you good.

Diebold as a Partner in EMV

We’re helping our customers in the U.S. transition to EMV. We’re partnering with financial institutions to set up a road map and strategy for deploying EMV compatible technology on their ATMs to upgrade their fleet and banking technology.

Last December, I presented my views on EMV. From security features to network changes, this webinar focused on EMV adoption and the progress made by financial institutions as it relates to the EMV liability shift.

My second webinar, “EMV: Where are you now?” focuses on the implementation and migration of EMV in the United States as well as responding to popular deployment concerns. Look for that information on the Diebold blog soon.

Let’s have a conversation about EMV and the next steps you need to take on your journey. Register for my next webinar, or connect with us virtually.