The Consumer ABCs Of EMV

Some could argue that we learn to be consumers before we learn to walk.

The experience of acquiring goods that give us a positive emotional response — a favorite blanket, a stuffed toy, a pacifier — occurs in life well before we acquire the skills to move and express ourselves with ease in the world. By the time we’re walking and talking, we understand what it means to want more things … and we are well on our way to becoming bona fide participants in the global economy.

Next to follow, of course, is our understanding of currency in cash form: What’s the actual value of a dollar? A penny? How much can I purchase with those things? From there, things get a little more abstract, as introduced into our “consumer development” (as it were) is the concept of credit. There comes a day for all of us when we learn that we can have whatever our hearts desire — as long as we know how to use a certain piece of plastic in our wallets.

In their original form, credit (and debit) cards — particularly in the U.S. — are an essential piece of the consumer experience; card-based purchases presently account for approximately 85 percent of all retail transactions. Cards have had ample time to attain that status, with credit cards having been around (in an early incarnation) since the 1950s, and debit cards joining the party in 1966.

Newer technologies born of the credit card, meanwhile, are by their very nature not as widely accepted by consumers at this point and time. Things like mobile payments and NFC — the technology that makes it possible to accept Apple Pay, Android Pay and Samsung Pay in stores — while certainly promising, are not exactly a pressing threat to the ubiquity of (now) old-fashioned plastic.

With the impending introduction of EMV-enabled cards and EMV-enabled readers going live at retail checkouts across the U.S. in October, however, the consumer relationship with credit cards at the point of sale is about to get shaken up — whether the consumer likes it or not.

As PYMNTS readers are well aware, while adoption is not technically mandated by any governing body, on Oct. 1, the liability shift will go into effect that leaves retailers on the hook for losses due to data breaches that occur via non-EMV-enabled transactions. Soon, the swipe of a card is going to be replaced with a dip, and while this is a seemingly small change, consumers might need to relearn some of the basics of making a purchase.

While some see this as a negative disruption that comes at a high cost to retailers with little return, many retailers are seizing the EMV liability shift as an opportunity to take a long, hard look at the customer experience at checkout and improve upon it at this unique moment in retail history when checking out once again becomes something of an education. By taking the viewpoint of the consumers, retailers could make EMV an enhancement of — rather than a deterrent to — the customer experience.

After a string of data breaches at major retailers across the U.S. over the last few years, consumer confidence in the security of their transactions took a serious hit. Meanwhile, in the United Kingdom, where chip-and-PIN was adopted early on and has become the standard, total card purchase volume grew 32 percent between 2005 and 2010, while total card fraud decreased 17 percent.

The introduction of new security protocols is an excellent opportunity for retailers to instill new confidence in transaction security and meet changing expectations around cardholder security as payments technology advances. EMV implementation gives retailers the opportunity to have a positive conversation with their customers around security at the cash register — provided that their staff is educated properly.

While cashiers probably don’t need to grasp all of the intricacies of EMV security, many top retail pundits agree that proper employee training is paramount in a smooth EMV rollout to customers. Paramount to creating positive customer experiences is being able to explain how the new transaction works, i.e., where to dip the card and what other actions (if any) are required to complete the transaction.

As Sage Payment Solutions points out, not all terminals will function the exact same way; some may have chip readers at the top or bottom of the terminal, and many will also offer tap-to-pay options, as well as NFC-enabled touchless capability. These are all potential points of confusion for the customer. Retailers need to ensure that their employees understand exactly how the card readers at their checkouts work, which options have been made available to customers and how to troubleshoot common problems that could arise during the transaction, including potential lag times in card authentication.

Regardless, questions are bound to arise from customers interested in understanding more about why the changes are being made in how they complete transactions with a retail business. A well-practiced response to “Why are you changing how I use my card?” or “What does the chip actually do?” could go a long way in creating a positive brand experience. At the very least, front-line retail employees should be informed enough to not disseminate misinformation related to the security of cardholder data.

It’s advisable to retailers in general to keep their employees — and their customers — focused on the benefits of the new EMV protocols. At the point of sale, customers would benefit from being briefed as to how EMV makes it harder for card data to be “skimmed” from the retailer’s POS and internal systems, how chip-enabled cards have long been the global standard for security and that the use of chip technology has been proven to decrease fraud. These simple talking points can go a long way in creating a positive experience as customers navigate a new transaction flow at the register.

That being said, retailers obviously don’t want to set their employees up to have conversations they are not equipped to navigate or in any way suggest the information they are offering is the company’s “official” stance. A smart practice to adopt might be to have employees refer curious customers back to their issuing bank to learn more about the PIN technology in their card. With most major banks in the process of reissuing cards, there is a plethora of consumer information available to explain the shift.

(For any retailer or consumer that might need a refresher on exactly how EMV protects both parties against data breaches, Chase Paymentech, for example, offers a concise FAQ for retailers. Not to toot our own horn, but PYMNTS also has you covered with some more in-depth information on issues related to EMV.)

One of the fringe benefits of the migration to EMV-enabled terminals is that most are also equipped to handle touchless NFC-powered transactions via mobile phones. Might EMV be the Trojan horse that opens the gates wide for mobile payments to go mainstream? Many retailers and payments players hope so.

With the majority of the new EMV-enabled terminals being distributed by leading providers, like Ingenico and VeriFone, already equipped to handle contactless transactions via mobile devices, it begs the question: Why wouldn’t a retailer also turn on that functionality?

“I can’t think of any reason why a merchant wouldn’t accept contactless unless they were selling very high-value items and wanted to do the transaction a different way,” said Jeremy Gumbley, chief technology officer for payment gateway provider Creditcall, in a recent interview published on Retail Customer Experience.

If mobile payments do in fact take off, as many retailers and payment service providers hope, there will likely be a series of learning curves for retailers to guide their customers through. By establishing a strong process for rolling out new payment technology to their customers now, retailers can be setting their business up for success for future technology implementations to come.

Well past the point of walking with credit cards, consumers are running. Perhaps next, they’ll be able to fly.