US retailers fear they’ll miss EMV transition deadline

chip

A US trade group is asking the payment-card industry to delay the October EMV transition plan that will leave the retail food stores and pharmacies it represents liable for fraudulent transactions if they are unable to meet the deadline.

Last week, the Food Marketing Institute sent a letter to Visa, MasterCard, American Express and Discover Financial Services, arguing that even with the best will in the world, merchants won’t be ready to meet the October deadline that will shift liability for card fraud from issuing banks to merchants if they continue to take mag-stripe cards.

The group asked that the deadline be pushed back to 2016.

“Regardless of how strong the commitment or how many dollars invested, the reality is that the system will not be ready to meet the card networks’ arbitrarily-set mandate for the liability shift in October 2015,” Leslie Sarasin, president and chief executive of the Food Marketing Institute wrote.

The US is one of the last countries to transfer from mag-stripe cards, which hold static information about card holders and can be easily duplicated if a retailer’s systems are breached. The call for a transition to EMV followed several high-profile breaches of retailers in 2013 and 2014.

Along with headline-grabbing breaches at Target and Home Depot, regional grocer Supervalu was also hit by hackers in 2014.

However merchants must cover the cost of updating their equipment, and are facing a 16-week delay for delivery of EMV-enabled card readers, the letter said. The group of American retailers also fears that the introduction of chip cards will cause larger checkout queues during the run up to the holiday season.

Chip cards have been used in Europe, Asia and Canada for years.

Representatives of MasterCard and American Express said they have no plans to change the date, the Wall Street Journal reported. Visa and Discover representatives could not be reached for comment.

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