When the major card brands introduced a software upgrade to speed up EMV chip card transactions seven months ago, their hope was to help merchants concerned about long lines and show payments at the point of sale.
But merchants have been reluctant to apply the terminal software upgrade needed for Visa Quick Chip (and other card brands' equivalents).
"We are seeing interest from merchants, but so far just a few implementations through their software partners have occurred," said Steve Cole, senior product manager for EMV at Vantiv. "So, instead of being rolled out to resellers, it is the developer, merchant or solution provider that needs to write the code to support this process."
Vantiv and other processors certify Quick Chip for value-added resellers and independent software vendors.
Four months after Visa and other card brands revealed the faster EMV options, the New Leaf grocery store chain in the San Francisco area became the first to implement the needed coding changes at the point of sale to move EMV transactions through Quick Chip or Mastercard's M/Chip Fast.
Since then, it has become apparent why a merchant would not use Quick Chip. First, there's no liability shift, as it was with the October 2015 timeline for chip card adoption in the U.S. The faster chip technology is simply the merchant's choice on whether to upgrade based on how the current slower EMV transaction speeds affect their business.
Quick Chip and other solutions promised to cut transaction times from about 12 seconds to about three. It delivers on the faster transaction time, but some merchants remain leery about undergoing significant changes. "Quick Chip reduces the approval transaction time on some cards, including a significant percentage of MasterCard and international transactions due to their offline scripting nature," Cole said. "And Quick Chip also reduces the number of test cases needed for all four of the card brands."
Most transactions in the U.S. occur online, or through terminals connected to a network, but most large retailers still want to support offline transactions. "They find value in the offline approval process when communications go down," Cole said. "And Quick Chip does not support this functionality."
Both Mastercard and Visa contend feedback from merchants and consumers has been positive, and merchants in the U.S. shouldn't put too much weight on the offline backup capabilities.
The U.S. market is more than 90% online for transaction authorization, and most cards in the U.S. are not coded for offline authorizations, said Chiro Aikat, Mastercard's senior vice president of product delivery and EMV. "Offline is just not needed at this stage of the game in the U.S."
However, when an online network is temporarily down, merchants initiate batch transactions or deferred transactions for authorization, regardless of whether a faster chip coding is in place at the terminals, Aikat said. "If a merchant believes that going offline for authorization is a critical component of their business vs. the consumer perception of speed at the point of sale, they absolutely should not implement M/Chip and we don't require them to do it," Aikat said.
When Mastercard and Visa first launched their versions of faster EMV they said the new software eliminates the extra testing and scripting that were common with standard EMV transactions in other parts of the world that continued to handle a majority of transactions offline.
A Visa executive wasn't available at deadline, but a company spokesperson noted the card brand has been receiving positive feedback about Quick Chip, and that merchants concerned about offline authorization can use deferred authorization. This process occurs when merchants have no connection to the network host, and deferring authorization and approving the transaction is based on the merchant protocols for risk management.
Those transactions are held until the merchant is connected to the network again, with authorizations occurring whether the card is mag-stripe or chip. Even though Quick Chip has eliminated the authorization function in chip processing, it can still be used for deferred authorization in a case when telecom is down, the spokesperson said.
M/Chip Fast or Quick Chip also continue to be an easy way for merchants, still holding out on EMV over concerns about consumer experience, to get on board quickly with a faster chip technology, said Elizabeth Fontaine, marketing manager for retail software company Index, which has worked with the Visa and Mastercard on the initial implementations at New Leaf and other merchants. "We're looking to take our merchant partners who are using traditional EMV to get them over to Quick Chip as well, so we are planning on more deployments," Fontaine said.
Current numbers for deployments for the card brands' faster chip technology were not available.
So far, consumer feedback has been positive, Fontaine added, mostly because with Quick Chip the consumer can place the card in the reader at any time during the checkout process, rather than waiting for the clerk's final amount.
"It's an experience they are so much more familiar with," Fontaine said. "It is better than waiting the up to 15 seconds that the traditional EMV card can take."
Application experts at Vantiv's ONE, or One Network Experience, developer hub have helped developers certify Quick Chip, allowing VARs and ISVs to get the option in front of more merchants and install it on their terminals.
"Nothing is really required for processors to support Quick Chip, because it is implemented at the POS," Cole said. As such, it is not a service that independent sales organizations can take to the streets, but more of a decision for merchants to make with their software providers based on what effect standard EMV transactions at their terminals is having on the customer experience.
More commonly a company like Mason, Ohio-based TranSend, a payments infrastructure provider, promotes its RevChip EMV and Near Field Communication software as one receiving Quick Chip certification through Vantiv, TSYS or other processors. TranSend then makes RevChip available to VARs and ISVs that work directly with merchants in implementing the software at the point of sale.