RIVERWOODS, Ill.—Following a CUToday.info report that indicates EMV rollout in the U.S. will lead to payments disruption and a great deal of consumer confusion, Discover predicts the early days of chip cards will be “rocky.”
“This is a huge change for consumers when it comes time to step up to the cash register. Consumers are going to have to start dipping the card instead of swiping it," Discover Financial CEO David Nelms told the Chicago Tribune, adding that some retailers won't even have the new terminals.
According to a recent Aite Group study, major retailers are POS ready for the October 2015 Visa and MasterCard liability shift deadline, while a large percentage of small merchants are not.
Aite Group told CUToday.info that consumer and retailer education is essential, and that banks and credit unions must get started now with informational efforts—as well as merchants instructing cashiers—so they can guide consumers through a changing POS experience.
“There just is going to be a lot of confusion in the marketplace,” said Thad Peterson, senior analyst at Aite Group. “The good news is mobile payments are finally ramping up. For Millennials and people who are aware of technology, all of these changes—EMV and mobile—won’t be a significant issue. But for others, they will need a lot of education.”
Discover’s Nelms told the Tribune that the educational job is up to everyone—from card issuers to merchants, noting that for EMV to be effective in fighting fraud, and to reduce payments confusion at POS, all merchants need to be EMV ready late this year.
"Frankly, we could issue all the cards we want with chips but if there's no terminals to use them, it would actually cost us money, and there would be zero fraud savings," Nelms said.