EMV's Poor Usability Shoves Consumers to Contactless Mobile
Since consumers find EMV cards frustrating and difficult to use, EMV may do more to promote NFC as the preferred payment method among consumers and business owners.
That may sound silly when you consider the fact that the credit card issuers are compelling merchants to install new point of sale systems that accept EMV payments. Failure to do so leaves retailers at risk of being found liable for cases of fraud. Meanwhile, the card issuers are rushing to get chip cards into their customers’ hands. CreditCards.com reports 70% of U.S. consumers now have EMV cards. That means more than 30 million Americans are using EMV cards.
Or, at least they’re trying to.
It turns out the process of “dipping” a smart card into the POS system isn’t as simple and straightforward as swiping the older magnetic strip cards. Sales associates too often have to instruct a shopper on where to insert the card, how to do so properly, and not to remove it until the transaction is complete. The systems can take about 30 seconds longer to process payments, holding up checkout lines. And consumers are more prone to leaving their cards in the machines when they leave.
Merchants are therefore hesitating to install the new POS systems. CardHub's 2016 EMV adoption survey finds that 42% do not have the new POS systems, despite the fact MasterCard and VISA set the deadline of October 1, 2015. They cannot afford to process fewer transactions every day, and don’t want to force their customers to use a payment method they find unnecessarily time-consuming and complex. It boils down to preventing longer lines at the checkout counters.
That opens the door for NFC payment technologies, which are much simpler and faster for both consumers and retailers. So it’s no surprise that major technology manufacturers such as Apple, Samsung and Google are incorporating NFC payments technologies in their smartphones and smartwatches.
Instead of making a customer wrestle with an EMV card PoS system, the sales associate can simply say “hold up your phone” or “flip your wrist." A quick scan of the device, and the transaction is complete. You don’t have to take a card or cash out of your wallet. Heck, you don’t even need to bring your wallet.
It’s important to note that card issues are both aware of, and addressing, the shortcomings consumers and retailers attribute to EMV. For example, the card networks have all recently introduced solutions designed to speed checkout times on chip transactions.
But consider the fact that there are so many payment methods available today: cash, checks, traditional magnetic strip credit and debit cards, EMV chip cards, and NFC. Having all of these choices confuses consumers and business owners. I believe this confusion, and the mounting frustrations over the complexities of EMV cards, will combine to position NFC as the preferred solution for both consumers and retailers.
Scott Blum is a vice president at Total Merchant Services.