In a roadblock for Apple Pay, only 1 in 5 US retailers are using their chip card readers
A new survey has found the vast majority of U.S. retailers with EMV chip-card-compatible credit card readers aren't using that functionality, presenting a major hurdle for acceptance of tap-to-pay services like Apple Pay.
EMV-capable credit card readers are now in use at about 5 million merchants in the U.S., following last October's soft deadline imposed by credit card companies. But only about 1 million of them have enabled the systems to start accepting chip-and-signature, according to MarketWatch.
Banks and credit card companies encouraged adoption of EMV readers by requiring merchants who haven't switched to cover the costs of fraudulent transactions. But hiccups with software compatibility have resulted in most hardware units not actually accepting EMV chips.
The bottleneck likely has an effect on adoption of Apple Pay, which can only be accepted at NFC-compatible payment terminals. While the EMV switch gave merchants an opportunity to upgrade to credit card readers that accept both NFC tap-to-pay and EMV chip cards, the lack of adoption of EMV means that other features of the new terminals, like NFC, are not enabled either.
Put simply, Apple Pay requires EMV compatibility to work. Therefore a terminal without EMV capabilities enabled cannot accept Apple Pay.
With traditional credit cards, the EMV standard depends upon a small embedded chip to authorize transactions, rather than reading data from the magnetic strip. Apple Pay, on the other hand, handles the EMV verification directly on an iPhone or Apple Watch.
Last month, Apple announced that Apple Pay was accepted at more than 2 million locations around the world --?a milestone crossed before the service expanded into China. It's also available in the U.S., U.K., Canada, and Australia.
EMV-capable credit card readers are now in use at about 5 million merchants in the U.S., following last October's soft deadline imposed by credit card companies. But only about 1 million of them have enabled the systems to start accepting chip-and-signature, according to MarketWatch.
Banks and credit card companies encouraged adoption of EMV readers by requiring merchants who haven't switched to cover the costs of fraudulent transactions. But hiccups with software compatibility have resulted in most hardware units not actually accepting EMV chips.
The bottleneck likely has an effect on adoption of Apple Pay, which can only be accepted at NFC-compatible payment terminals. While the EMV switch gave merchants an opportunity to upgrade to credit card readers that accept both NFC tap-to-pay and EMV chip cards, the lack of adoption of EMV means that other features of the new terminals, like NFC, are not enabled either.
Put simply, Apple Pay requires EMV compatibility to work. Therefore a terminal without EMV capabilities enabled cannot accept Apple Pay.
With traditional credit cards, the EMV standard depends upon a small embedded chip to authorize transactions, rather than reading data from the magnetic strip. Apple Pay, on the other hand, handles the EMV verification directly on an iPhone or Apple Watch.
Last month, Apple announced that Apple Pay was accepted at more than 2 million locations around the world --?a milestone crossed before the service expanded into China. It's also available in the U.S., U.K., Canada, and Australia.
Comments
So, what happens now; they're assuming all liability for fraud?
Seems it must not be a problem for most of them then.
Personally, I have rejected my issuers attempts to get me to use an NFC enabled card. That's because I did have my identiy stolen. That means Apple Pay is great for me.
Then there are the problems on using out of state cards at some gas stations in the US. Visitors don't have US Zip Codes.
Come USA get with it (please).
"Apple Pay conforms to the latest EMV standards for tokenizing transactions, which leads to a more secure payment experience. With the EMV shift, merchants should update their terminals to support the latest software, which should also include NFC (near field communication), so you can accept Apple Pay and other contactless transactions." -- https://support.apple.com/en-us/HT205645
Just because the reader is disabled doesn't mean that the terminal, the merchant's backend, and the processor are not running EMV.
http://gizmodo.com/it-takes-these-brazen-thieves-just-seconds-to-install-a-1765447063
Apparently, businesses have to go through a certification process before using EMV. I assume that once they get certified by whomever (read the article for details about), they can enable Apple Pay.
The chain in Florida is saying that the processors are dragging their feet to continue to shift liability away from themselves and onto retailers.
Seems pretty shady.
1. Having an EMV chip reader is not required for NFC to be activated. They are mutually exclusive. You can have an older terminal with NFC which works fine with my phone.
2. You can have a newer terminal with NFC deactivated. This is generally what I find at merchants that don't accept NFC payments of any type.
3. I have used my iPhone at merchants where NFC is enabled even though they don't advertise support for Apple Pay, per se.
4. A CSR at Apple told me that a store can still require a PIN with Apple Pay. Their decision whether to require a PIN or not and they can set the transaction level to require a PIN.
Side note, I hate the new chip readers, regardless of the improved security. They are slower and inconvenient. Standing there with my wallet in my hand for the whole transaction while waiting for the machine to let me take the card out slows everything down. For example, at a self-checkout register, I used to swipe my card, put it back in my wallet immediately, grab my bags wait for the receipt and go. Now the whole transaction takes almost twice as long. This whole chip and PIN mess feels like the transition to supplemental restraint systems in cars decades ago. We had to live with a few years of clunky automatically retracting seatbelts before we got to the cleaner airbag solution. In this case paying with a tap of the phone is the airbag.
The Apple Pay transaction itself takes place via contactless EMV; if the terminal and the merchant's processor don't support EMV, Apple Pay will not work. NFC is just a transit protocol. See https://support.apple.com/en-us/HT205645 for more info.
With Apple Pay there is no credit card swipe data to match the club card info to. So, stores don't want to enable it even though they have the technology.
Many fuel dispensers in the USA (for sure in Hawaii, apparently elsewhere in the USA as well) accept the numbers-only from the postal code of a Canadian billing address followed by two zeros. It may work for other foreign postal codes too.
So, if your Canadian billing address is H2W 1L2, you would enter '21200'. Where the '212' are the numbers from the postal code, and the '00' is padding to get to 5 digits.
Also, for big purchases in he US you have to sign, so the whole speed advantage goes away.
When the back-end is fast and terminals new, like at many McD, around here the difference between sliding and chip is near zero.