Merchants are likely to find the final sprint to meet the U.S. EMV liability-shift deadline is a tougher task for them than it is for card issuers.

Larger retailers who say their payments system is currently ready to accept EMV chip-based card transactions may have only half of the needed technology in place, says Barry McCarthy, First Data president of U.S. financial services.

"They are not saying they have EMV readers at their locations," McCarthy says. Most of the work done for "EMV ready" merchants relates to software, he says. "Now they have a major capital investment to make."

Merchants who do not make this investment face a shift in fraud liability in October 2015. Still, some might decide that the fraud risk will not be big enough by that time to justify the investment, McCarthy says.

"Think of a merchant with 13,000 locations and five or six POS lanes per location on average," McCarthy says. "Multiply that by $200 per unit, and that is a significant capital investment."

Because First Data and other companies are now able to handle EMV cards at scale, the "table will be set for EMV to explode" in the coming months, McCarthy says. "But the merchants may not be ready."

Merchants can fall into three categories that will miss the 2015 deadline, says Thad Peterson, senior analyst with Boston-based Aite Group.

They may have EMV devices in place, but not all of the needed software; they may have the software in place, but not the devices; or they may have both, but have not been certified to accept EMV transactions, Peterson says.

"We all know this is a really complicated conversion, and it has to be done right and it has to be done well," Peterson says. "There are an awful lot of moving parts and thousands and thousands of locations."

The conversion will move more aggressively in the coming months than it might have if not for the highly publicized retailer data breaches during the past holiday season, Peterson says. Both Target and Neiman Marcus reported significant breaches that exposed cardholder details.

"But we have to remember that there is a large number of retailers out there still running a terminal attached to a cash register with very little connectivity," Peterson adds. "It will be a real long time before 100 percent of those get changed."

The EMV migration will make it apparent that not all retailers are created equal, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.

"There are some retailers who understand the hazard of the current system and are trying to upgrade to EMV, so as to be ready as early as possible," Luria says. "But there is a very large group of other retailers who will wait for the very last second."

First Data and terminal manufacturers like VeriFone and Ingenico are preparing for EMV in a way that caters to the dynamics of merchant demand, Luria says.

First Data is selling merchants a console called the FD35 that provides ports for needed accessories to attach to the payment terminal. The merchant can add a PIN pad, an EMV card reader, a Near Field Communication antenna or a magnetic-stripe card reader to the console, which attaches to the terminal through one port.

The console is helping merchants make the conversion to EMV quickly, McCarthy says. "We have to future-proof our terminals, and that device allows a merchant to accept any type of payment or form factor coming his way."

It's difficult to predict the outcome at October  2015, McCarthy says.

"A normal card replacement cycle for 100 percent of cards is a three-year window," he says. "It might go faster than that because issuers want to take advantage of that liability shift and push fraud losses, at least for a time, to the merchants."

Over the next two years, about half of the country's EMV conversion will be completed, with more progress following over time, McCarthy says. 

As the liability shift deadline nears, issuers will be able to quickly adapt, putting more pressure on merchants, Aite's Peterson says. "The issuer has the ability to do a sprint for that last 100 yards, whereas the retailer doesn't necessarily have that capability."

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