Retailers not ready for EMV

With only nine months until the EMV migration deadline, retail and technology professionals remain unprepared, according to a recent survey by ACI Worldwide.

EMV—Europay, MasterCard, and Visa—is the global standard for credit and debit card payments. The industry deadline for U.S. retailers to adopt EMV technology is October 2015, at which point retailers without EMV-enabled point-of-sale systems will become liable for credit card fraud at their locations.

The survey of 200 retail industry professionals was conducted in January 2015 at the National Retail Federation’s Annual Convention and Expo in New York.

October approaches, but efforts lag

Principle findings of the survey included:

• EMV readiness—Nearly one quarter of respondents are still not fully prepared for the migration to chip and PIN technology, despite the impending October deadline. Of the retailers surveyed (55% of total respondents), 14% still have work to do, 19% are not prepared, and 22% are still evaluating their options.

• Breaches and payments security—More than half (59%) of respondents cited costs of  2014 data breaches as impacting investments in payment security initiatives. Thirty-nine percent have already increased investments in payment security initiatives while 20% indicated they plan to increase investments in payment security initiatives over the next 12-24 months.

• Omnichannel—Beyond payments security, respondents anticipate the top three biggest investments will be in omnichannel sales/seamless customer experience (37%); mobile payments acceptance technology (20%); and online/ecommerce initiatives (20%).

• Mobile wallet war—Respondents predict Apple (47%) will emerge as the dominant mobile payment technology provider. Google (21%) came in second followed by PayPal (15%).

Concentrating on today’s fires

Despite retailers’ intent to increase investments in payments security, the survey found a notable lack of urgency regarding the migration to chip and PIN technology. Just 12% of retailer respondents are already compliant, while 19% are confident they will meet the October deadline though they currently aren’t ready.

“Data breaches are top-of-mind for retailers, which have already or are planning to increase payment security spending, yet a sizable number of those surveyed are not fully prepared for meeting EMV timelines,” says Lynn Holland, vice-president, ACI Worldwide. “At the same time, consumers want assurances that their data will never be compromised when they make purchases.”

Holland added that many retailers that the firm speaks with are taking steps to address the EMV requirements, but like any major undertaking, are trying to manage this along with other payment security, IT, and technology initiatives.

Over a third of respondents are making omnichannel investments their top priority for 2015, although they are divided on the best approach. Forty-one percent have different technologies supporting different shopping channels, and 38% are currently addressing all modes of shopping as a single experience.

Retailers and mobile payments

Mobile payment acceptance is also top-of-mind for investments this year, and respondents were particularly confident in Apple’s strategy. The release of Apple Pay in late 2014 spurred renewed focus on the mobile channel, and more than twice as many respondents selected Apple as the champion of mobile payments over other key players including Google, PayPal, and MCX.