One of the most significant trends affecting ATMs right now is the EMV chip standard. Once limited to Europe, the standard is now being used all throughout the world. It is seen as a more secure and effective way to make payments through credit or debit cards. Despite being jointly made by American card networks Visa and MasterCard, the U.S. remains one of the last holdouts in switching over. However, two key issues have only accelerated the process. First, card networks will be placing fraud liability on merchants after October 2015 if they don't switch over to the chip cards. Additionally, recent data breaches have heightened consumer awareness of cybersecurity. The liability shift for ATMs will take place in 2016, so banks that deploy machines supporting EMV sooner rather than later can stay ahead of the curve and increase the trust customers have in them.
There has been much progress made in the migration from magnetic stripe cards to EMV. However, as ATM Marketplace notes, banks won't be completely ready in time for October's liability transfer deadline. Citing a press release from the Payments Security Task Force, the Web publication found that eight of the largest financial institutions, representing 50 percent of U.S. payment card volume, would add chips to 63 percent of the debit and credit cards they will ship this year. The number is expected to reach 98 percent by the year 2017.
On the other hand, merchants are a little slower to make the switch. The Payments Security Task Force found in November 2014 that 47 percent of retailers in the U.S. will have migrated to EMV by the end of 2015. In its most recent survey, that number remains unchanged.
There are various reasons for the slower adoption rate among merchants. For one, many are small businesses that don't have the benefit of economies of scale to purchase new card readers that support EMV. More importantly, they may not be aware of the significance of the chip cards and may not even know that there is a fraud liability deadline. Either way, given the complexities of accepting credit card payments, the migration process may be too complicated for most small retailers. An alternative is to go back to paying with cash and install ATMs with EMV compatibility. With this, not only will retailers be able to remain compliant, but they'll also earn a little cash while they move toward adopting the chip standard on their own.
June 1, 2015