The road of America’s EMV migration has been one of missed and rejigged deadlines and targets. However, according to Visa – which described the liability shift as a “significant undertaking” – a more positive mood is in the air as over 300 million chip cards in market and 1.2 million merchant locations are now accepting chip cards. An average of 23,000 new merchant locations become chip-ready each week.
As the months of 2015 came and went, early optimism gave way to the cold touch of reality as, with nine months to go, a report revealed that 55% of retailer respondents still had some way to go before they would meet the deadline requirements.
The day after the deadline passed, the Payments Security Task Force, whose members include American Express, Bank of America, Visa and MasterCard and account for roughly 50% of US payment card volume, said that 30% of their U.S. consumer credit and debit cards contain EMV chips as of June 30. However, more recently, MasterCard published figures suggesting, EMV adoption is back on track – but questions about obstacles to the momentum weren’t sufficiently addressed.
Terminal certification issues
Visa joins in on the positive news but also admits, “Despite the success to date, a migration of this size takes time and hence many merchants still require help to cross the finish line.”
One of the big obstacles to full EMV adoption is terminal certification. Merely buying an EMV terminal is only the start of the process that turned out to be more laborious than merchants anticipated. They have to ensure the terminals were certified to support an EMV transaction. If it’s not certified, it can’t support transactions, which in turn means they pay up after the liability shift. The more complicated the merchant’s point of sale environment, the more tests need to be run.
Visa is seeking to simplify the certification process by streamlining its implementation process, saying they can shave months off the process that includes development, testing, and certification.
Self-certifying for acquirers
The payments giant is also introducing a “self-certifying” feature that will provide acquirers greater discretion to determine the appropriate level of testing required to ensure a merchant’s solution is ready.
“Acquirers know their merchants better than anyone, so providing acquirers with the commercial flexibility to self-certify their clients will further reduce certification wait times for solutions that acquirers are confident are ready,” the company said in a statement.
In order to avoid test duplication, Visa says it is also thinking about introducing a system that would allow acquirers to share test results with each other. For example, if a certain merchant configuration (e.g., restaurants with specific hardware and software) is known to consistently work with one acquirer, then other acquirers should be aware of this and take it into consideration as they make their decisions.
More resources and migration support
The company also said it will increase the amount of funding available to acquirers and value-added resellers that work on chip-development software.
In addition, Visa will provide hands-on support to VARs who may need technical information, education, consulting, and training. A dedicated team of Visa experts will be available to provide direct support in the form of webinars and direct one-on-one conversations, as needed.
Counterfeit chargebacks policy rejigged
Traditionally, it is issuers who have been responsible for the cost of fraudulent transactions but since the October liability shift, the responsibility lies with the party that has not implemented the chip technology. This ties back to the issue of certification – if merchants are still in the process of implementing EMV terminals, they will bear the responsibility if a counterfeit fraud transaction occurs.
Visa is modifying its policies to limit the number of fraudulent transactions that issuers can charge back to merchants (and their acquirers). Effective July 22, 2016, Visa will block all U.S. counterfeit fraud chargebacks under $25.
“In addition, effective October 2016, issuers will also be limited to charging back 10 fraudulent counterfeit transactions per account, and will assume liability for all fraudulent transactions on the account thereafter. This reinforces the responsibility issuers already have to detect and act on counterfeit fraud quickly. These blocks will stay in effect until April 2018,” the company said.
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