4 Ways EMV Ruins the Point-of-Purchase Experience
The end result is that there are now many merchants and consumers expressing frustration over increased friction at the point of purchase. We even saw a local café a few miles from Shift4’s headquarters advertising their mobile-based rewards program by listing “avoid using the chip reader” as a key benefit.
So, what makes EMV so deplorable? We’ve created a list of the top 4 ways EMV chip cards are ruining the point-of-purchase experience for merchants.
- Losing Control Over Your Customers’ Experience
Having control over the customer experience is a top priority shared by all merchants. You want to be true to your customer service philosophy and make sure they keep coming back. One of the key touchpoints between your staff and your customers is when they’re purchasing goods or services. However, EMV dictates the end-user experience at card-present points of sale from the very moment a customer first inserts his or her card – sometimes earlier. This leaves very little choice for merchants as to how these transactions are processed, and that’s something that is going to take a lot of getting used to.
EMV has created a new end-user experience that can’t be easily customized because it is defined by EMVCo, the organization that introduced and regulates EMV chip cards. Learning how transactions work with EMV and educating your staff is the best way to adapt right now. And, hopefully, the EMV specifications will evolve over time. If not – don’t worry, mobile wallet usage is expected to keep climbing, and Shift4 supports all of the most popular ones, like Apple Pay, Samsung Pay, and more. Some merchants are even introducing NFC/contactless-only lanes!
- The All-Powerful Chip Card
Unlike the magnetic stripe cards of old, which enabled very simple swipe-and-go transactions, the new “smart” cards have application identifiers (APP IDs) and cardholder verification method (CVM) lists that further complicate – and lengthen – transactions.
- APP IDs – Depending on the brand of the card, each EMV chip has applications loaded onto it that dictate how the transaction will process, including which bank’s network the transaction will be routed through. This complicates things for merchants because it takes a big part of the process out of their hands, including whether or not to prompt a customer for debit. Some customers are shown a vague screen with seemingly redundant choices, such as a choice between “Visa debit” and “U.S. debit.” If you’re wondering what APP IDs mean for the Durbin Amendment’s federal regulations of debit cards, then you’re not alone; U.S. Senator Dick Durbin recently wrote a letter to EMVCo with a list of his own questions about it.
- CVM Lists – While an EMV chip will verify whether or not a card is authentic, each chip has a pre-loaded list of potential ways to verify the cardholder. This aspect of EMV has been completely debased in the U.S. implementation of EMV, and often the card issuers will change the CVM required to compete with each other, so this makes things tricky. Some customers can now use their EMV chip cards in certain big-box stores and walk away without verifying themselves with a PIN or even a signature – even on a $100 transaction – and merchants aren’t given any chance to require CVM because the chip is calling the shots. We can’t help but wonder where the liability for chargebacks in these cases will fall if the cardholder later falsely claims their card has been stolen.
- Bossy Terminals
While EMV chip cards have taken control of the transaction, they aren’t the only ones. As terminals are certified for EMV, they, too, are loaded with APP IDs and CVM lists that communicate directly with the chip cards and identify which EMV chip settings it will support. Quite literally, while you’re waiting for an EMV chip transaction to authorize, part of what’s going on is a conversation between the chip and the terminal that defines how that specific card will be processed, such as whether to authorize the transaction using EMV protocols or to allow a fallback to swipe.
- Variable, But Rigid, POS/PMS Coding
The specifications for how EMV chip cards interact with payment terminals are set by EMVCo. But, these specifications are interpreted individually by the card brands, and then interpreted again by each individual processor. This impacts how system providers certify for EMV and leads to some variability between how EMV works when a customer uses a Visa card versus a MasterCard, at a retail store versus your local coffee shop, and even between one retail store and another.
Merchants have also been frustrated by the lack of choice with regard to the sequence of system screens, the length of receipts, the death of “swipe ahead”, and even with how long the chip transactions take. What it comes down to is that the EMV specification involves 300+ “required payment flows” that control how transactions are processed; this takes the control out of your hands, the customer’s hands, the system provider’s hands, and even the terminal manufacturer’s hands.
EMV Quick Chip: A New Hope?
Unfortunately, there isn’t much wiggle room when it comes to EMV. However, there is a chance for good news on the horizon. With Visa announcing that EMV Quick Chip will be available later in the year and other modifications being released along the way, the U.S. implementation of EMV will adapt over time. However, everyone in the industry – merchants included – will be at the mercy of EMVCo whenever EMV is in play. Rest assured that Shift4 is right at the cutting edge of the market and will offer new solutions as they arise – if not sooner!