We’ve heard the buzz about smart cards for years, but since they haven’t made a big appearance in the United States, many retailers, Working Person’s Store included, still haven’t installed terminals that read them.  EMV (Europay, MasterCard and Visa) smart cards have been around since 1994 and are widely used today in Europe.  Is it time for American retailers to get on board?

While there were more than 1.5 million EMV-compliance cards being used around the world last year, U.S. card issuers and retailers have stuck to the traditional mag-stripe card.  Things will be changing, however, since several U.S. banks have started issuing cards with both a mag-stripe and a chip.  In fact, many are considering smart card rollouts within the next three to five years.

A motivating factor for retailers to update their technology is the improved fraud liability.  Even while the prevalence of smart cards is still relatively low, retailers will soon become liable for fraud made on cards containing a chip if no smart card-reading device is available. Mainly because of this, retailers are expected to spend the next twelve to eighteen months preparing EMV implementation plans before these liability shifts go into effect by the credit card associations in late 2015.

The earlier retailers can begin preparing for this change, the smoother the transition will go.  Retailers must begin by learning more about EMV and what systems need to be implemented to accept smart cards long term.  When it comes to updating technology, the options can seem overwhelming.  Many retailers may choose to add other updates such as mobile and contactless payment options, as well.  However, retailers must keep the goal in sight – EMV compliance – and not make things too complicated.

For smaller retailers, the switch may be as easy as consulting the supplier of their current POS systems.  Newer systems may only require add-ons or upgrades in order to be able to read EMV.  Older systems, on the other hand, may need to be completely replaced.  Larger retailers that have customized, complex POS systems are going to need much more extensive system changes.  Either way, updating these systems can be a major undertaking.  Retailers who have recently made changes to their systems, but still aren’t EMV compatible, may be forced to make a similar investment again.

U.S. retailers have been safe using mag-stripe-reading systems, but changes to the way people pay are imminent.  If retailers allow themselves sufficient time for proper planning, the switch to EMV acceptance can be made smoothly and efficiently.