Chip card payment confusion, anger rages on

Merchants blame card companies for delays in certifying EMV software

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The retailers also didn't provide any facts showing an antitrust conspiracy by the banks and card companies under the antitrust definitions used in the Sherman and Cartwright Acts, the defendants added.

A Visa spokeswoman told Computerworld that the card company had no comment on the lawsuit. Other defendants named in the lawsuit did not respond to a request to comment on the record about the lawsuit or the charges made by the NRF and others. Some referred questions to the EMV Migration Forum.

Visa launches Quick Chip tech for faster checkout

On Tuesday, Visa announced a technology enhancement to speed up chip card processing for customers from about eight seconds for the normal chip card process at checkout counters down to one to two seconds. The Quick Chip for EMV enhancement means that customers don't have to wait until the end of the checkout process to insert a chip card and also don't have to wait until the transaction is approved to remove the card.

The normal chip card payment process has confused many customers and caused problems for store systems and clerks. One manager of a CVS drug store in Virginia told Computerworld that when customers remove their chip cards before a transaction is finished, it causes the payment terminal to lock up, requiring the clerk to reboot the terminal, which causes even longer delays.

Merchants fell behind because of complex conversion

Vanderhoof, who represents both major banks and larger merchants on the Migration Forum, said that despite three years' notice of the liability shift, "merchants have fallen behind partly because it is complex to convert, and many waited much longer to start or underestimated the time to complete conversion."

A spike in merchant testing of chip card systems occurred after Oct. 1, but then was paused because of holiday sales. After Jan. 1, "we got this super traffic jam" in certifications, he said.

Vanderhoof said he wouldn't necessarily blame the banks or card companies, or even the hundreds of payment processing companies like Vantive, Global, First Data and others for the current logjam.

"This is going to take a year to work its way out, and it will get better from here on out, but until then we're dealing with a messy payments market for a while longer," he said.

When the Oct. 1 deadline passed, the backlog was as long as six months for a merchant to get a new chip card in-store system certified, said Dick Mitchell, director of solutions for Randstad Technologies, which deploys point-of-sale devices to stores and helps merchants understand the shift to EMV.

"Retailers are really taking a hit on this while banks aren't happy about having to deploy hundreds of thousands of chip cards," Mitchell said. "Retailers are still a little angry about the deadline and concerned about the liability. The only way to deal with all that is to get the systems up and bite the bullet and make the investment."

Retailers have little control over certifications

Gartner analyst Avivah Litan said she's sympathetic to the plight of retailers. The two retailers who brought the federal lawsuit, as well as others couldn't, or still can't, accept chip cards because of the backlog in receiving certifications, she said.

"Retailers couldn't turn on their chip card systems because they don't control certifications," Litan said. "Retailers feel there was a plot to get them to pay for fraud."

Banks and card companies "shouldn't have put the liability shift in place until the conversion was done. It put merchants in an unfair position," Litan added. "They shouldn't have set a deadline before the industry was ready. There was a big backlog a year ago, and you didn't have to be a rocket scientist to see that the retailers were screwed and were stuck with the liability shift."

Copyright © 2016 IDG Communications, Inc.

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