The migration to EMV chip cards in the U.S. has hit enough snags that some may wonder if it's better to let someone else smooth things out.
Michael DeSimone, CEO at mobile point of sale software provider ShopKeep, says his company may be best served by waiting out what he calls EMV's "bumpy rollout" until certain aspects become much clearer.
In October of 2015, the party unable to accept EMV transactions became liable for fraud chargebacks at the point of sale. But this liability shift hasn't been enough to convince all merchants to adopt EMV, with some even deciding to fall back to faster magstripe payments.
"We are working diligently to get EMV rolled out, but I don't feel like I am missing anything yet," said DeSimone, who took over as CEO of New York-based ShopKeep in January, after then-CEO Norm Merritt left for personal reasons. Merritt held the CEO position at ShopKeep since May 2014.
Sensing the card networks may develop "something a bit easier" for the EMV process over the next few months, DeSimone is willing to let his company accept fraud liability for its merchants and wait for the chaos from lack of education, backups in certification and mounting chargebacks to subside.
Such an approach is far easier for a software provider like ShopKeep that mostly targets small shops and restaurants.
"Those types of clients don't have a lot of chargebacks," said Richard Oglesby, senior analyst at Double Diamond Payments Research. "If you are not happy with your meal at a restaurant, the wait staff generally takes it off your bill right there. They don't get chargeback disputes on that."
EMV was designed to thwart organized fraudsters making counterfeit cards, and those types of fraud rings rarely target restaurants or small shops because "they can't steal stuff they can monetize," Oglesby added.
DeSimone acknowledges that EMV is "a bit of a non-issue" for his clients, but his company's mission remains the same — to make sure ShopKeep merchants can accept all payment types without any delays or tech issues.
"We will get EMV rolled out, and the bumps the entire industry is facing will get fixed over time," said DeSimone, whose company is working with Ingenico to develop EMV solutions. "When we are at a year [October 2016] after the EMV launch, the picture will probably become more clear."
ShopKeep takes the same philosophy into the mobile payment arena, trying to provide all of the tools its merchants need to accept any new payment types.
"We put a big push on in terms of our ability to accept Apple Pay at terminals through our software, and when we rolled it out, 60% of our base was able to accept it," DeSimone said.
ShopKeep software also supports other Near Field Communication forms of payment, DeSimone added.
While it has no preference of one mobile pay method over another, ShopKeep has concluded that consumers are happy with how Apple Pay operates. But too many consumers remain uncertain of where to use it.
"Our employees have gone into merchant locations using ShopKeep software and the merchant will say they cannot accept Apple Pay," DeSimone said. "We tell them they can, and show them how. So it does take time for people to get used to it."
As mobile wallet adoption increases and consumers rely on more aspects of their smartphones for daily living, comfort levels and understanding with mobile wallets at the point of sale will improve, DeSimone said.
DeSimone joined ShopKeep as its chief operating officer in November of 2015, coming from his role as CEO of Borderfree, which he took public and later sold to Pitney Bowes.
"It certainly isn't my mission to come in and put my own personal stamp on the company," DeSimone said. "Let's think of it as every team member leaving their mark on the company here."
ShopKeep now serves more than 22,000 merchants. At the end of the first quarter in 2015, ShopKeep's merchant count was 16,000.
"That is a very big jump from where they were," Double Diamond's Oglesby said. "Square is out there as the leader in mobile POS with a couple million, but ShopKeep has a very significant size when you get outside of the world of Square."