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I was standing in line at a Walmart store in Fairfax, Va., when I spied the tell-tale slot in the credit card machine. Under the slot was a stylized image of part of a credit card with a chip. So when it was my turn I slipped one of my credit cards with an EMV (Eurocard MasterCard Visa) chip into the slot and waited.
The pharmacist and a staffer moved over for a look. A series of prompts appeared on the credit card reader’s LCD screen, at which point I punched in my PIN. The transaction took a few more seconds, then a receipt came out of the printer. I’d just done something that’s all too rare in the U.S., despite the fact that it’s common everywhere else in the world. I’d made a purchase using a chip and PIN card.
When I talked to the pharmacist at the register, she told me that only a couple of other customers had attempted to use cards with chips while she was there, but she said that she knew they were starting to appear in Walmart’s stores. Part of the reason, she said, was that the company’s own branded credit cards were all being replaced by chip and PIN cards.
My search continued. I shopped at several Target stores and two Home Depot stores in the Washington, DC, suburbs. The machines with the slots for accepting EMV cards were usually there. Target, which was hit a year ago by a massive data breach, seems to have replaced all of the card reader machines. But they didn’t accept EMV cards—you still have to swipe the card so the machine can read the magnetic stripe.
At Home Depot, which had an even worse data breach, the implementation of secure card readers seems to be only partially complete. I kept looking. The manager of a Safeway grocery store in Fairfax County, Va., had no idea what an EMV card was, for example.
But there were bright spots, as well. I was able to make secure payments using either cards with EMV chips or with Apple Pay at a variety of stores including at the Wegmans grocery chain and at a Subway restaurant.
I was able to buy a healthful and nourishing breakfast at McDonalds securely. I took my quest to Sam’s Club in the remote city of Lynchburg, Va., and I was able to buy some Diet Coke and a land line phone using my EMV-equipped credit card.
I also visited a number of small businesses and whenever I had occasion to use a credit card, I would ask about EMV acceptance.
Chip and PIN Cards Finally Winning Acceptance in Retail Sector
What I found interesting is that nearly half of the small businesses I visited in the month or so when I was looking actually had credit card readers that are capable of accepting cards with EMV chips. But none of those businesses was actually able to let me make a purchase using one.
So what’s going on here? Think of it as a kind of complex, three-way, chicken-and-egg problem. For a secure payment system to work, three things need to exist. The first is having a secure means of payment, such as a credit card equipped with an EMV chip.
The second is a means of reading the payment method, such as an EMV-equipped card reader. The third is a means of processing the secure payment, which boils down to secure payment point of sale software and a banking network able to support it.
Right now in the U.S., there are gaps in all three. But the good news is that the first gap is starting to close. There are a number of credit, debit and prepaid cards available for those who want to request them. The folks at Credit Card Insider have thoughtfully provided a list.
Solving the second problem, which is having a way to read secure payment methods, is also within easy reach. Most merchant processing services that provide machines are now providing them with EMV capability as well as the ability to accept contactless payments using things like Apple Pay or Google Wallet. In addition, some business product sellers, including Staples, offer the card readers that support a variety of platforms at very low prices.
That leaves only the payment network and POS software that’s able to complete the process. Many smaller businesses will find that a call to their merchant processor or their bank will provide access to the network.
The POS software is a thorny matter for some businesses and it’s not one that’s solved easily or cheaply because it can mean updating your existing software or completely replacing your POS terminals. For some businesses, including Target and Home Depot, this is the sticking point.
But this doesn’t need be a roadblock to your business, nor does it need to be a major investment. What it does take is an investment of time to talk to your bank or credit card processor.
The benefit to your business may be lower processing fees because of the reduced risk of bogus cards, and in 2015, a way to avoid liability for counterfeit, lost or stolen cards completely. Considering the relatively low cost of the change to EMV card acceptance, it’s almost certainly a move that makes economic sense.