Retailers that have long criticized the card networks' plan for them to accept EMV-chip cards are starting to view the smart-card migration as a reason to adopt mobile payments.
"Mag-stripe [technology] is not broken, so there was really no reason for us at Murphy Oil to look at mobile, but EMV changes that," says Bill Deichler, manager of payment methods for Murphy Oil USA.
Deichler has been an outspoken opponent of the EMV migration in the U.S., despite the card networks' decision to let gas stations have an extra two years to switch to EMV before facing a shift in fraud liability. Gas stations are urged to adopt EMV by October 2017, whereas most other merchants face a 2015 deadline.
Deichler and others voiced their opinions about how mobile was changing the traditional point of sale this week during the Ramp conference in Chicago.
Deichler has previously stated that Murphy Oil may not switch to EMV because the company suspects its own fraud controls are enough to counter any added costs from the card networks' liability shift.
The EMV payment process may even add a risk of card theft, he says.
"To do a transaction, EMV cards stay in the reader at a gas pump the entire time the customer is pumping gas," Deichler says. "Do you know how many customers will leave their cards in the pumps?"
Fuel retailers have four years to come up with an alternative "and take a stand against the networks," Deichler says. "I would now recommend that retailers really study cloud-based mobile payments as a way to avoid EMV costs and potentially cut down on PCI [Payment Card Industry security standards] compliance costs," he adds.
In researching mobile payments, Office Max executives determined that the company's current terminal setup was taking up too much space, says Christina Garcia, senior manager for retail systems at Office Max.
"We went to tablets to right-size our locations," Garcia says. "Because there is no clear winner in the mobile wallet race, we are keeping our system very flexible."
The Office Max mobile terminal accepts mag-stripe, contactless and mobile-phone payments, and is also EMV-capable. "I wish we could just go to mobile and forget EMV, but we do have to be ready," Garcia says.
Establishing a mobile point of sale in a store has as much to do with business policies as it does with technology, Garcia says. "Mobile creates endless-aisles capability and it does speed up the checkout process."
However, in the early stages of testing mobile POS in aisles, Office Max realized some customers with three or more items needed bags and the clerk would have to go to the cash register anyway, Garcia says. In addition, the company learned that shoppers may still request a printed receipt.
"You have to work on this slowly and build processes around it," she says.
Tim Stepp, director of POS and payment systems for Walgreen Co., says the pharmacy chain has been active in exploring its options for mobile payments.
Walgreens' clerks have been testing the use of mobile card readers to "complete sales in the aisles and let the customers be on their way," he says.
Stepp wasn't as critical of EMV as some of the other merchants were. However, in considering options for terminal upgrades, he says, "we believe a consistent platform is better because there would be too much training involved if we had various methods in place at the point of sale."