New technology makes EMV transactions almost as fast as traditional mag-stripe ones.
As retailers continue to transition to EMV readers, one of the major obstacles has been the reduced speed of transactions using the chip cards. To counter that challenge, MasterCard has unveiled M/Chip Fast, a new application that it says will bring EMV transactions close to the speed of traditional magnetic-stripe cards.
Capable of being added to existing point-of-sale systems that accept MasterCard, the M/Chip Fast technology allows users to remove their EMV-enabled cards from terminals faster. As with standard EMV transactions, M/Chip Fast creates a unique code for each transaction to prevent counterfeit fraud; once the code is generated, however, the card can be removed from the reader, which MasterCard said slashes processing time and reduces the cardholder perception of a prolonged checkout experience.
“Ultimately, we all want to deliver great experiences for consumers and merchants,” said Ajay Bhalla, president of enterprise risk and security for MasterCard. “That’s why we believe that M/Chip Fast or any similar product should be implemented in consultation with the industry. With that holistic view, interested merchants can easily integrate this with their current systems to provide both speed and security for all chip cards.”
The added seconds required for the new EMV readers to register the encoded card has actually taken quite a toll on overall retail sales. Many retailers complained about the added friction that resulted from the more secure EMV credit cards, slowing retail rollouts and obstructing widespread adoption.
According to the Wall Street Journal, these extra seconds per transaction are not just annoying; they are quite costly. Citing a survey by JDA Software, the WSJ noted that a chip card added some additional eight to 12 seconds per checkout, resulting from a combination of factors: customers are still acclimating themselves to the new cards; some are attempting to use traditional mag-stripe processes first; and some customers are asking for assistance from the clerk. At just one retailer studied by JDA, the additional transaction time could add a whopping $3.2 million to annual labor costs.
The new application may not be right for every merchant, however, and while Patty Walters, head of security products at Vantiv asserts that “The need for speed at checkout is important for the consumer experience,” and that “innovations like M/Chip Fast will help balance significant improvements in payments security with technologies that can help merchants accelerate the flow of their checkout lanes,” retailers that haven’t found EMV transactions to be a problem may want to skip the M/Chip feature.
Ajay Bhalla, president of security solutions for MasterCard, told PYMNTS that the new application will be most appropriate for businesses where shoppers are in a rush, like when they’re getting coffee or fast food, or hopping on the subway.
“We think that [M/Chip Fast] should only be used by institutions that actually see it taking much longer to process a transaction than standard EMV,” Bhalla explained.
Even though the shift in liability went into effect in October 2012, , according to a study published last month by personal finance website CardHub, approximately 42 percent of retailers across the United States still require customers to swipe their credit cards. Retailers that fail to implement EMV cards could be liable for more than $8 billion in fraudulent transactions each year.
