• by Maeve Duska , December 15, 2016

Change is hard. And nothing underscores that point more than today’s payment environment. With 62% of Americans surveyed in a June 2016 Gallup poll predicting a cashless society in their lifetime, most agree cash is going the way of the dinosaur.

What remains to be seen is which next-generation technology will replace it.

As EMV chips cards terminals are adopted by more retailers, consumers are faced with a choice to either jump in and embrace the dip, or jump over EMV completely in favor of mobile payments, like Apple Pay and Android Pay.

Here’s why mobile will win.

1. The Laziness of Chip and Choice

Unlike in Europe, where a “chip and pin” approach is embraced for every credit-card transaction, Americans have the middle-of-the-road “chip and choice,” enabling a user to sign for their transaction as they have in the past. 

This approach offers little protection against the use of a stolen card, according to USA Today, which points out that retailers are dismayed at spending billions on new equipment to process cards that are not as secure as they should be.

The assumption that chip cards are more “safe” because they make it impossible for the card to be reproduced is outdated. Hackers, like those recently covered in a Business Insider story, can still find ways to inexpensively tap into EMV terminals to capture transaction data. 

Unfortunately for EMV cardholders, it remains unencrypted. Mobile payment technologies use “tokenization,” changing the information for every transaction so it cannot be duplicated.  This ensures that consumers making a purchase using their phone are protected from hackers every time.

3. Consumers Despise the Chip Transaction

Consumer complaints, confusion and overall poor usage experience of chip cards have been covered at length by the media, and is driving greater awareness (and adoption) of mobile payments. 

According to Jack Connors, head of commerce partnerships at Google, during the recent PayThink conference in New Orleans: “EMV has disrupted the consumer experience sufficiently to create an opportunity for mobile wallets.”

4. Mobile Payments Have Hitched a Ride on the EMV Train

Most EMV terminals are equipped with NFC (near field communication) technology, which enables electronic devices, such as an iPhone, and a payment terminal to communicate with each other when they’re close together, according to Apple Pay’s support page.

This means retailers implementing EMV, whether they know it or not, have also been building the infrastructure to support wide-scale acceptance of mobile payments. Further, retailers can actually skip EMV in favor of NFC terminals, which are about half the cost, making it a much more effective tool for merchants wanting to offer greater security without all the baggage.

5. Mobile Payments are Crazy Secure

In addition to tokenizing the payment, most smartphones requiring a password or biometric reading, such as a fingerprint, for access. All transactions using Apple Pay, Android Pay and Samsung Pay require fingerprint authentication. These three levels of security protect a transaction against phone theft as well as inhibit stolen information from being accessed, while offering a faster, easier experience.

A recent USA Technologies study found that consumers shown a digital Apple Pay ad on a screen at point-of-sale at self-serve retail locations were more likely to use their smartphones to make the purchase.  Results showed an 89% increase in revenue through contactless purchases on these machines.

With more retailers installing EMV or NFC terminals, and consumers expecting mobile payment capabilities at the register, it’s only a matter of time before consumers leave their wallets at home in favor of the phone in their back pocket.

Whether consumers’ complaints of chip cards are justified or not, EMV is forcing every consumer to evaluate their payments. During the PayThink conference in September, Frank Liddy, head of strategic partnerships at Paypal made a persuasive argument, noting at the “Beyond Payments - What’s Next for Mobile Wallets” panel: “At the end of the day, EMV will be the driving force that makes mobile wallets successful.”