NEW YORK – EMV chip cards and mobile payments are a constant topic in the payments industry lately, but according to some, large merchants are far from sold on either technology. An article this week from DigitalTransactions.net cites merchant comments during a recent payments-technology conference, describing the problems they have with the current EMV rollout plans, among other payment industry issues.
The article goes on to say that while most big retailers are gearing up for EMV in an effort to beat the Oct. 1 liability deadline, they’re not necessarily happy about the way the technology is playing out.
One big issue is that EMV debit card transactions will likely follow paths determined by the major card networks rather than by merchants, despite debit-routing choice mandated by the Durbin Amendment to the 2010 Dodd-Frank Act. With EMV debit transactions, merchant terminals must open and access two application identifiers to give the merchant network-routing choice, a two-step process that could add significant time to each transaction. This complication will be even more glaring with NFC transactions (such as Apple Pay), which involve a tap or a wave of the card.
Under Durbin, merchants must have a choice of at least two unrelated networks for routing of debit transactions. The EMV specifications, however, don’t allow for such choice, a problem the payments industry wrestled with for months before finally settling on a solution last year. That settlement, however, came late in the game, and the industry is still struggling to catch up with software and hardware.
Another frustration with EMV is that it imposes multimillion-dollar costs for multilane merchants but does nothing to lower acceptance costs. At the same time, the fraud it combats will represent a savings only for the banks that collect card interchange.
The merchants’ approach toward mobile payments is equally wary, according to DigitalTransactions.net. With a number of digital-wallet providers battling for supremacy — including Apple Pay, Samsung Pay, Google Wallet and the merchant-endorsed CurrentC — some merchants argue it’s best simply to wait before committing to any particular product.
To learn more about EMV and the latest technology developments in our industry, consider attending the Conexxus Annual Conference April 26-30, in Annapolis, Maryland.