Despite being more than a year past the U.S. EMV liability shift, there’s still much work to be done. Depending on which organization you choose to believe, with an estimated 7 to 8 million merchants and approximately 16 million payment terminals, there are millions of devices that still need to be upgraded. Indeed, after looking at all the data available, my estimation is that there currently are only about 2 million locations that are EMV-ready today.
In addition to these 2 million locations, there are another 3 million locations that are going through the transition with some of these already having devices in place. The estimated number of deployed EMV-compliant devices is 8 to 9 million and, with just a couple months remaining in 2016, we will likely be at 9 to 10 million by the end of the year, leaving 6 to 7 million devices yet to be deployed.
Visa reports that approximately 23,000 merchant locations are being added per week, which sounds very impressive. However, at that rate, it will take 4 to 5 years to get to 90 percent of the market. While this sounds like a long time, it’s worth noting that it took the UK about 5 years to make it all the way through its EMV migration.
An important note concerning these deployments is that many of the EMV-compliant devices already in the field cannot be used because they are waiting on certification. For an EMV transaction to occur you need a chip card inserted into a chip-enabled terminal, and although many terminals are chip-enabled, they may not as of yet have gone through the needed certifications to activate them as EMV terminals. The EMV terminals need to be level 3 certified with the processor of choice.
As reported by the "State of Retail Payments 2016 Study" by the National Retail Federation (NRF) and Forrester Research, 86 percent of retailers expect to have EMV payment terminals in place by the end of this year. However, 57 percent of merchants report that while they have installed EMV equipment, they cannot enable it because they still are awaiting system certification. Of those, 60 percent have been waiting six months or longer.
Processor certifications are a big undertaking as each payment terminal type needs to be certified with each of the processors for full coverage and market flexibility.
Processor certifications are a big undertaking as each payment terminal type needs to be certified with each of the processors for full coverage and market flexibility. If you look at the list of payment terminal types and the number of processors, the permutations are daunting. Obviously a lot of work has been done already with a very long list of certifications complete, but there remains a lot of work to do. For example, if you assume approximately 50 different payment terminal types and 10 processors (with the actual numbers being higher), you end up with a low estimate of 500 different terminal/processor combinations. That assumes everything works and there are no problems.
The good news for software developers is that it’s possible to ease the burden of EMV certifications and shorten this wait. Creditcall offers various solutions to make EMV less daunting. For instance, we offer our ChipDNA SDK, which provides the largest number of EMV pre-certified PIN pad/processor combinations for iOS, Android, Windows, and Linux. We also offer ChipDNA Direct (formerly CardEaseXML), which is an XML-based protocol that exposes all the payment transaction features of our payment gateway.
More importantly, when it comes to EMV certifications, our history of navigating the certification process for hundreds of software developers over the past two decades has resulted in a 100 percent first time pass EMV certification track record. Software developers working with Creditcall can expect a partner that helps navigate the complexities of payments, easing the burden of EMV migration, to get back to doing what they do best — adding value to their software solution for their customers.
Insights from Lars Pedersen, Creditcall CEO.
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