How has the US reacted to the liability shift?

With two months having passed since the US market implemented payment security upgrades in the form of the EMV standard, it is time to check back in and see whether the October 1st deadline was realistic or optimistic.


Original expectations too high

Early on in the year, expectations were high for the amount of merchants converting to the EMV-standard, as were the predictions for the amount of Chip cards issued.

However, as the October 1st deadline loomed ever closer, expectations of near-universal coverage had to be tempered. By August, only 10 per cent of Americans received the new chip-enabled cards, and nearly a third don’t know how to use them. By mid-September, only 27 per cent of US merchants were predicted be EMV-ready by the October 1st liability shift and at the end of October, a report found that the conversion to the Chip-and-PIN cards has been “overwhelming”.


Optimism gave way to realism

However, once the initial optimism gave way to realism, the figures became less disappointing.

Rather than seeing the date as the end of a process that began in 2012, it has now been reimagined as the true beginning of a journey that will end in 2017.

According to Visa, by the end of October, 180.6m cards were issued in the US, marking a 531 per cent increase from October 31st, 2014. Seven out of ten Americans now purportedly have at least one chip card in their wallet, whilst just under 600,000 merchant locations are EMV-enabled, marking a 49 per cent increase in the month of October alone. Furthermore, the volume of chip transactions in the US increased by 42 per cent in the last month, from $4.8 billion in September 2015 to $8.9 billion in October 2015.

Findings from another study, confirm the belief that too many expectations were heaped on the October 1st deadline – unreasonably so. Whilst a staggering eight out of ten US credit unions revealed they missed the deadline, an encouraging 46.4 per cent said that despite the fact they weren’t prepared for the initial deadline, “they are close to finishing their EMV transition,” according to research from Credit Union Times.


Final destination: 2017

As more and more reports hammer home the idea of the journey just beginning, 2017 has been the year generally touted to be the date of arrival. The number of chip cards in the U.S. from these issuers will to grow to 60 per cent by the end of this year, and expanding to 98 per cent by the end of 2017, according to a forecast from The Payments Security Task Force’s eight financial institutions. This is enforced by a separate study from BI Intelligence, which presents the same figures.

Furthermore, it should be noted that the October 1st deadline was only for point of sale terminals, not for pay at pump or ATMs. The deadline for them is is October 1st 2017. These are not nominal, in fact these deadlines are one of the major reasons for why 2017 is likely to be the year of the near-universal coverage.

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