Merchants today are taking an interest in EMV like never before. But with the card networks’ mandated liability shift more than a year away, those retailers making upgrades today often have broader security interests in mind. For one top terminal maker, citing EMV just makes the broader trend easier to explain.
Merchants throughout the U.S. are focusing more intently these days on the card networks’ October 2015 EMV mandate, when those unable to accept a presented EMV chip card for payment face liability should a counterfeit version of that card be used later. But retailers making their hardware changes today aren’t necessarily doing it solely because of the mandate, according to a top terminal maker.
Indeed, while the sense of urgency is growing, the concern is much broader than the type of card merchants can accept, VeriFone CEO Paul Galant noted last week during a conference call with analysts to discuss company earnings.
Retailers are reviewing the point-of-sale environment at all major payment-terminal brands, Galant noted on the call. It’s top of mind, it’s what their chief information officers wake up worrying about, and it’s what their boards are asking the CEOs about, he said.
“They’re walking around with clipboards, and they’re really getting to the details,” Galant said. “They are not kicking the can down the road, as perhaps some of them were a year ago.”
Merchants capable today of replacing terminals are doing so, but they’re not putting them in because of EMV; there just aren’t a lot of EMV cards out there to merit hasty moves. The broader and more immediate strategic urgency is in greatly improving the security in both the online and the point-of-sale environments, Galant said.
“They’re putting it in as part of a comprehensive redo, where they are doing encryption on an end-to-end basis, (where) they’re talking about securing their website and making sure that none of their customer data is ever in the clear,” he said. “EMV terminals is the way we articulate the fact that they’ve done something. But it’s not really because they want an EMV terminal a year before cards are going to be out or any time before the liability shift. It’s really because it’s part of upgrading the security of their environment.”
That said, VeriFone is benefiting from the increased interest in EMV, added Marc Rothman, the company’s chief financial officer. “The order input is absolutely better than it’s been over the last 12 quarters,” he said. “The momentum in the retail business in North America is excellent.”
During the quarter, 15 existing VeriFone clients selected the MX 900 series EMV-capable platform as their next-generation payment system, with rollouts underway at CVS and Kohl’s locations. Galant said. Additionally, Galant boasted of six clients formerly with competitors, and three new U.S. clients, that adopted consumer-facing payment systems for the first time in order to prepare for EMV acceptance.
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