Adyen retail report: The checkout experience
In the U.S., we’ve all seen the payment terminals at checkout that look like they accept the recently mandated chip cards. But in fact, they don’t. There’s either masking tape over the insert slot, or we are told that the store isn’t yet accepting chip cards and we should swipe.
Retailers are still struggling to switch a fully EMV-supported solution.
It’s been almost nine months since the U.S. EMV liability shift occurred, and retailers are still struggling to switch a fully EMV-supported solution. Even if they have hardware set up, the EMV certification process is so complex and time-consuming that EMV cannot be fully implemented. . The National Retail Federation conducted a study a few months ago, which found that 48% of responding retailers had implemented EMV; of those who have not implemented it, 57% say they have the equipment, but don’t have certification. Meanwhile, other numbers state that around 5 million EMV-ready terminals are in U.S. stores now, but only one-fifth of those have started accepting chips.
The certification process as it stands today is incredibly layered and involves many different players – that are often times fragmented – along the payments value chain. If just one of these players in the process lacks the necessary certification, the entire chain is rendered uncertified, and chargeback liabilities fall squarely on the shoulders of the retailer.
Take one global retail company that recently encountered this headache as they moved toward updating all of their systems to be EMV certified in the U.S. While this company’s acquirer was fully certified, their processor wasn’t, which meant they were still liable for chargebacks. The charges quickly added up and ultimately cost the company between six-to-seven figures per month - underscoring why it’s so important for retailers to move swiftly to ensure they are EMV-certified.
This story, unfortunately, resonates with a lot of retailers. After all, becoming EMV certified can take up to 11 steps, which can take a total of four-to-five months to complete.
First, your terminal has to be EMV-certified, which can mean buying new hardware that is able to accept chip cards. If your current terminal provider isn’t certified, then you should go no further in the process.
Then your POS payments system has to be able to handle the EMV purchase. This also means your processor has to be upgraded to correctly interpret and process chip card data as well as be able to communicate with an acquiring bank that needs to understand the new data.
Bear in mind once again that every one of these players must be certified or you are not EMV compliant, and are therefore liable for fraudulent charges even if other components are set up for EMV. For example, a retailer may already have an EMV-enabled terminal and acquirer in place, but if the processor isn’t certified, then EMV compliancy is null.
To top it off, all of these certifications must occur with each card scheme, and if you want to go contactless, it requires yet another certification per card scheme.
Once the terminals and certifications are in place, you’ll need to work with your PSP to begin testing. This can take months, during which you’re exposed to liability.
Confused? We don’t blame you.
Is this necessary? No.
With Adyen you can be up and running with EMV within a few weeks.
With Adyen, you could be up and running with EMV within a few weeks, and that includes a suggested weeklong period of testing. We’ve already done the hard work of pre-certifying with the schemes, and we provide Verifone certified terminals, so any transaction from our terminals doesn’t need further certification.
Adyen acts not only as the gateway, but also the processor and the acquirer. Our built-from-the-ground-up architecture covers the whole value chain. So rather than dealing with the fragmented components of EMV compliance, you’re essentially just working with one partner.
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