To Chip or Not to Chip


Retailers in the United States mostly converted to chipped credit cards in October 2015 and slowly over the past 3 years we have all become accustomed to dipping credit cards at retail checkouts. So, why are we sometimes sliding cards the old-fashioned way rather than dipping (plugging the cards into the terminal) at some retailers?

There are a couple issues behind whether a retailer has a chip-equipped terminal but still has you slide your card for payment. In addition to installing a new chip-ready terminal for checkout, the merchants must also install new software and then certify with their transaction processor that transactions are coming through accurately. Certification of their new process takes time and scheduling.

Another reason for merchants’ reluctance to adopt EMV is the additional time it takes to process a credit card transaction. While sliding a credit card takes only a few seconds, dipping the card into the card reader slot takes up to a minute longer because the transaction is verified in real-time. During non-rush months, an extra minute might be inconvenient but not noteworthy. However, during peak retail periods such as the winter holidays, every minute counts and retailers want those minutes spent shopping, not at the register.

Smaller localized merchants are somewhat more willing to take the gamble that the credit cards they’re accepting are not risky and will not affect their ability to receive funds from the transaction. In addition, smaller merchants don’t see the clear benefits of EMV chips because it doesn’t add to increased sales and it doesn’t make it easier for them to process credit cards. They know there’s a risk of credit card fraud but it doesn’t outweigh the pain and process of converting to EMV completely, certification included.

Another issue is that the United States has primarily adopted “chip and signature” technology, rather than “chip and PIN,” not providing the same level of security expected of the overall chip implementation. Moving to chip and PIN authorization is still pending in the US.

The whole movement to chip-enabled cards originated with major financial institutions (Europay, MasterCard, and Visa – EMV), pushing the responsibility for credit card fraud back on merchants, rather than absorbing the costs of fraud themselves. This has been the impetus of law suits still pending.

The US has lagged significantly behind other countries in converting to EMV. Among the largest global markets, the US was the last to make EMV law. It took more than a decade for other countries to fully adopt EMV. While it seems slow in the United States for the adoption of EMV, it is far ahead of the UK adoption, which took about 8 years for 90 percent conversion. The EMV Academy expects the US should be at 90 percent adoption by some time in 2019. Good news for those of us wanting better security for card-present credit card transactions. 

For more information about credit card services and merchant payment processing, contact Mike Krause at Sales Sense Payments by visiting or calling 585-704-6453.

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