Customers try to pay with chip cards, why retailers aren't ready

Customers try to pay with chip cards, why retailers aren't ready
Published: Mar. 23, 2016 at 11:01 PM CDT|Updated: Mar. 23, 2016 at 11:53 PM CDT
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(KFVS) - If you've tried to make a purchase with your micro-chipped credit or debit card, it's likely you've stuck your card into the machine only to hear a store clerk say, "Sorry, we don't accept the chip yet."

The Europay, Mastercard, Visa or an EMV card is the newest and most secure form of electronic payment by card. Instead of swiping a magnetic strip, you "dip" a micro-chip into the card terminal.

Some five million stores in the United States have purchased and installed EMV terminals, according to the industry group EMV Migration Forum. Only about one million of those stores actually accept EMV cards.

Tom Imboden is an Associate Professor of Information Systems Technology at Southern Illinois University Carbondale. He said many companies are behind because they have yet to upgrade their in-store software to work with the new machines.

"You can have the hardware but if you don't have the software that bridges between the hardware and the databases that processes the payments and sends it off to the merchants, you don't have the full piece of the puzzle I guess," Imboden said.

In October 2015, the responsibility of fraudulent claims shifted from banks to businesses for all that aren't using the new EMV system. However, Imboden said the changes haven't seemed to push companies to make the shift.

But until a costly data breach or hefty fine is imposed on a big company -- it's unlikely we'll see quick shift to the new system, Imboden said. He said making the upgrades can be expensive.

"Anybody that's worked at a company that's had to an upgrade knows that it can be you know painful," he said. "And so a lot of what I think we're seeing is some of these growing pains."

The EMV migration benefits both the customer and the business, Imboden said. EMV cards used in combination with a PIN are far more difficult to duplicate to be used for fraudulent activity, Imboden said.

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