One year post introduction of chip cards to American customers, it is seen that usage of such cards has greatly increased. These new cards need a dip instead of a swipe. Chip enabled cards are also known as EMV- the initials standing for Europay, MasterCard and also Visa. These are much more secure than their predecessors as unique codes are generated per transaction. This makes such cards hard to counterfeit.
There are a number of problems, however. With the holiday season looming near, a few shoppers have complained that the process of checking out of stores equipped with such card readers consumes too much time. It does not help that delays in the installation of the chip reading terminals have only increased the logjam. This problem was verbalized by Mallory Duncan of National Retail Federation when he said that the transition has been a challenge for customers and also for the merchants. He alleged that the system was cumbersome and does not provide the desired level of protection to customers.
For all its so called faults, the adoption pace of the new card has noticeably increased. Chip enabled cards now comprise 88 percent of the total MasterCard branded cards being used in the United States. This is a 105 percent increase from October. About two million merchant locations have the capability to manage EMV transactions.
Towards better business
Stephanie Ericksen, the vice president responsible for authentication and risk products for Visa, said that the pace of adoption in the US can be satisfactorily compared with other countries. She pointed out that other chip card adoption nations like Canada, Australia and Brazil took about two years to reach what the United States has done in a space of one year. It is to be appreciated that these pace happened even as the payment system was more complex in the US.
Fraud is down after adoption of the new system. Visa has reported that counterfeit activities at merchants capable of processing chip transactions has dipped about 47 percent in May, when compared with the identical period in 2015. Its competitor, MasterCard has found that merchants who have implemented the new EMV technology in its entirety have found that fraud related costs dipped 54 percent in April when compared to the same period in 2015. In contrast, merchants who have not installed the new system suffered a 77 percent rise in fraud cases. This is particularly seen among larger businesses.