Many companies are idling while the U.S. considers its options for handling the migration to chip cards from magnetic-stripe cards. Even a company based in the UK finds itself stuck.
The card network-mandated shift to EMV smart cards has come up against several hurdles, such as the technology's incompatibility with U.S. debit-routing regulation. Another issue is confusion over hardware upgrades for merchants who must also invest in data security compliance and mobile payment advancements.
"There is a high level of choice in payments technology now, and we are not sure that is a good thing for the retailer," says CreditCall Ltd. CEO Peter Turner. "None of the technology works unless a retailer invests in it."
UK-based CreditCall, which has U.S. offices in New York City, provides EMV chip-card software to manufacturers of payments hardware and terminals, while also advising those new to smart cards about the technology specifications needed to accept cards built for the EMV standard.
The company also plans to introduce its chip-and-PIN mobile card reader in the U.S. in the coming months, but won't jump into action until the EMV picture in the U.S. becomes a little clearer.
The current fast pace of payments technology represents a "turbulent phase" for the industry, Turner says. "We have to get through this storm and, when we do, I believe we will find a different and much cleaner beach."
CreditCall has provided EMV technology in Europe for several years, and opened its New York office late last year to help U.S. acquirers and merchants speed up their EMV migration.
For CreditCall to achieve this goal, the U.S. payments industry first has finalize its choices for handling EMV chip-and-PIN or chip-and-signature payments, says Ingrid Anusic, head of marketing at CreditCall.
"When banks and acquirers tell us what they want to do, we will be able to help," Anusic says. "One of the biggest things is whether they will introduce chip-and-PIN on credit cards as well as debit."
Various companies in line to help American retailers prepare for EMV are stuck for the moment, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
"The main level of paralysis is at the retailer level," Luria says. According to the card networks' timeframe, "acquirers will be the first to adjust, but retailers already are reluctant to upgrade to EMV and Near Field Communication because they view it as a standard that is not set yet," he says.
The industry has yet to establish a common application identifier for debit transactions and it has not yet resolved the debate over whether to use a PIN with EMV payments in the U.S. These issues reinforce the retailers' decisions to wait on upgrades, Luria adds.
Turner is joining other payments executives at the APPS World North America conference in San Francisco this week to discuss these issues.
Acquirers and merchants have to look at payments technology options and choose "something that is really going to work in practice," Turner says.
The general population has become well educated in the use of smartphones and shopping online, two factors that bode well for the future of payments, Turner says.
Once the industry answers its lingering questions, CreditCall plans to sell its CardEase Mobile pay software and an accompanying mobile card reader for white labeling through independent sales organizations in the U.S. The card reader, which communicates wirelessly with the user's phone, has a built-in keypad for entering a PIN.
Visa Inc. recently offered its technology for the creation of a generic common application identifier to address the debit-routing issue. This is an example of the types of decisions that have to be made to advance the switch to smart cards, Turner says.
"We are going through a payments evolution, and the retail industry has an opportunity to reshape it," he adds.