Mobile payments may get a shot in the arm with the new credit cards coming.
But that boost may be delayed by the lack of adoption by businesses.
As anyone who recently received a new credit card may be aware, chips are now being embedded in the cards.
This is all part of the new liability standard with the terrible acronym of EMV, which stands for Europay, MasterCard and Visa.
In other countries, the cards also are referred to as chip and pin, since a card is inserted into a terminal and the consumer enters a PIN number to complete a transaction. The U.S. version is more like chip and sign, since the consumer will sign after the card payment is verified.
Starting in October, any merchant not set up for EMV cards assumes the liability for fraud, currently handled by the credit card companies.
But based on a number of market-reads, consumers may not be using their new cards in the way they were intended at many places that they shop. For example:
You get the idea.
The reason EMV could impact mobile payments is not because of the technology but rather because of the behavioral change.
While not the most secure technology on the planet, a credit card swipe is lightning fast.
Consumers are used to this. One swipe, maybe a signature, and done.
Not so with EMV.
The chip card gets inserted into the payment terminal and the consumer waits. Then the consumer has to remember to take the credit card out of the machine. These are changes in how people will be required to pay.
And that’s the opportunity for mobile payments to kick in.
A tap of a phone with Apple Pay or Android Wallet suddenly may look more appealing than the new, insert-the-card process.
While a mobile phone payment may be slower than a credit card swipe, it likely always will be faster than an EMV card transaction.
But then again, EMV has to be widely deployed at merchants for the difference to be noted.
Consumers may be in the driver’s seat on this one. More than half (57%) of small businesses would adopt EMV if customers complained enough about not being able to insert their EMV chip card, according to the Cayan survey.
If consumers complain that they want to use their new cards, many may find using their phone is a better way to pay.