Chip reader not enabled. We’ve all seen those words pasted over retailers’ point-of-sale (POS) terminals. As consumers with EMV chip cards in hand, it can be frustrating not to be able to use them. Before jumping to blame retailers for not accommodating the latest payment technology, it is important to consider what is happening behind the scenes.
According to a recent study by the National Retail Foundation, 57 percent of retailers with EMV chip card terminals installed say they are still waiting for equipment certification. Sixty percent of those retailers say they’ve been waiting six months or longer. Until their equipment and software can adhere to industry regulations, retailers are not able to begin processing EMV transactions.
The EMV certification process has, in fact, become something of a pain point among retailers. Although certification is necessary to ensure POS systems work with all major card brands, it is a complex process sometimes involving hundreds of individual tests. These tests can take two weeks to eight months to complete, costing retailers hundreds or thousands of dollars.
While waiting to become EMV certified, retailers may be liable for additional fraud costs. The October liability shift that took effect in 2015 mandates the retailer bear any fraud costs resulting from a chip card being used in a non-chip card POS terminal. Some retailers have even turned to the courts for relief from this liability.
To help expedite the certification process, Visa and MasterCard have adopted new policies. Under these new policies, the required number of certification tests has been reduced. This seems promising for retailers awaiting EMV certification.