The EMV MasterCard liability shift has come and gone – and with it quite a bit of consumer confidence and convenience in card payments. The card payment space for the point of sale (POS) seems to have hit quite a few road bumps and customers are feeling the pain.
Consumer Pain at the POS
The issue with POS implementation has been caused by several levels of disconnect. The first issue is the uneven playing field when it comes to merchant implementation. While the latest statics show around 50 percent of retailers have installed EMV-ready hardware and software, there is a second level to POS compliance – a required certification process. Many of the stores that have implemented hardware are still on a long waiting list for the certification. And, despite increased news coverage and announcements, some smaller merchants are still in the dark about chip card implementation – unaware of the liability shift deadlines or see implementation as a wasted operating expense.
Many financial institutions (FI) have also either decided not to implement EMV or to hold off on a card transition due to a low cardholder base or the costs involved. Those FIs that have not already implemented EMV have likely not introduced any literature about EMV to the cardholders. Similarly, there is no guarantee cardholders with new cards paid attention to the information and instructions provided to them by their banks or credit unions.
Bottom line, cardholders don’t like EMV. No one knows when or how to use it at the POS. The experience is not the same across face-to-face POS purchases and the transaction takes too long. As far as most consumers are concerned EMV has removed the convenience from the card payment scheme.
Learning from the POS EMV Transaction
The good news is FIs can use this as a learning experience for ATM implementation. With the clock ticking down to the MasterCard liability shift for ATMs on October 1, 2016, there is still time for banks and credit unions to make a better impression.
FIs that have already issued chip cards in advance of the 2015 POS shift can take extra steps to educate their cardholders. While cardholders may be disappointed with their POS experience, the majority of that vitriol is currently targeted at the retailer. To avoid taking the heat when ATMs directly associated with banks or credit unions make the switch, it is important not to rely on a year of interaction at the POS. FIs should amp up cardholder outreach and education while making certain the EMV experience will be universal across their ATM portfolio – including any surcharge-free networks and outsourced ATMs.
Banks and credit unions that have held off on EMV should take a similar approach – introducing an increasing level and variety of educational materials to their cardholders – even prior to issuing new cards. The ATM portfolio should also have a higher level of evaluation to ensure a unified experience.
A Smoother Transition at the ATM
Consumers have been frustrated by the EMV process at the POS because they are unfamiliar with the way the transaction works and it is not universal at all POS terminals. The result is confusion and longer transaction times as both merchants and cardholders wade their way through the learning process. While cardholders may be disappointed at the length of time an EMV transaction takes, the process will speed up once they are more familiar with the steps and know exactly when it should be used.
The key to avoiding these problems for a smoother ATM transition is to create a unified experience. It is up to FIs and their ATM networks and suppliers to make this happen.
An industry leader in the payments space, Paul Albright is Executive Vice President of Outsource ATM. Connect with Paul on LinkedIn or follow him on Twitter.
President & CEO of Outsource ATM, Troy LeBlanc has been helping financial institutions address their ATM needs for almost 20 years. Connect with Troy on LinkedIn or follow him on Twitter.