Study: Retailers lax in upgrading payment technology

WASHINGTON – Six months after the deadline for credit card companies and merchants to upgrade payment terminals and smart-chip technology, a new study finds retailers behind in their response to the new law.
The EMV payment technology was designed in response to the many data breaches realized at companies in recent years. Last year’s Oct. 1 deadline came with the requirement that all credit card companies adopt the new technology at the same time merchants upgraded pay terminals.
Card Hub, a credit card site owned by Evolutions Finance, released a study last week saying the retailer’s response has been “shockingly muted,” compared with financial instituions, according to the study. Unlike before the law was enacted, retailers that do not adopt the technology and fall victim to a data breach will now be liable.
“The roughly $8 billion in fraudulent card purchases made in the U.S. each year certainly represents a mountain of risk for resistant retailers,” according to the survey.
Card Hub surveyed 55 major retailers and 1,000 individuals. The company found 42 percent of retailers had not updated their terminals. Additionally, 43 percent of retailers that have fallen victim to data breaches in the past five years had not updated their systems.
The delay, however, doesn’t seem to concern individuals, as 56 percent of respondents said they “don’t care if a retailer’s payment terminal is chip-enabled,” according to the results. Less than half – 41 percent – of respondents said they had – or knew they had – the new smart-chip credit card.
The full results of the survey, along with a list of merchants and retailers that have adopted the technology, can be found at www.cardhub.com/edu/emv-adoption-survey/.