Tallying the Cost — in Seconds — of EMV

It was inevitable that someone would try to add up those extra seconds it takes to perform an EMV transaction, and when Cayan did it concluded that EMV is forcing U.S. consumers as a whole to spend years in extra time at the register.

Compared to the time it takes to swipe a magstripe card, EMV will wind up costing 116 million hours in the U.S. in its first year, according to Cayan, the Boston-based ISO and merchant technology company that used to be called Merchant Warehouse. Cayan based its math on factors such as the reported numbers for EMV adoption at merchants, consumer usage, EMV cards in circulation and the average number of card transactions a consumer in the U.S. performs in a day.

For a consumer that uses his or her card 4 times per day, EMV adds more than 5 hours in checkout time over a year, based on estimates that EMV transactions take about ten seconds longer than magstripe payments, according to Cayan.

Cayan's numbers probably aren't exact, and there isn't a lot of science on the aggregate impact of EMV on checkout lines in stores, though some media outlets like NPR are trying to get a handle on how much longer it's taking to use chip cards at the point of sale. But even if the extra time is half of 116 million—or 53 million hours—that's still the equivalent of six years in total time beyond the average magstripe transaction.

"We've all been waiting in lines," said Henry Helgeson, CEO of Cayan, who like a lot of people is stressing the mental impression of longer transaction times along with the change required of consumers. "And if there's someone in front of you that's taking 12 to 15 seconds to do a chip card payment, that can seem like an hour."

The numbers are reminiscent of the impact of longer commutes, said Michael Moeser, director of payments at Javelin Strategy & Research.

"Those are definitely eye-catching numbers," Moeser said. "The U.S. EMV rollout has been called everything from 'great,' to a 'challenge' and finally 'a disaster,' depending on who you are speaking to."

Cayan's argument is for improvements in in the code that dictate how the parties in a chip card transaction communicate with each other and verify the consumer and payment.

"The code needs to be rewritten in these devices," he said, adding that was starting to happen at terminal manufacturers and processors, so there is hope. "The rules for EMV don't really need to change."

Cutting transactions by 10 seconds would reduce checkout hours by 75%, Helgeson said.

The card networks have developed faster methods for handling EMV transactions, though these options have just started to be deployed at merchants, so it's still too early to know how much of a dent the faster EMV options will make in the aggregate time increase, Helgeson said.

Any substantial adjustment will be long term, since merchants are loath to change the technology at the point of sale as the holiday shopping season approaches, Helgeson said.

"We're getting close to the 'freeze time' in retail," Helgeson said. "In November the retailers don't really change what they do during the holiday season. And that will be tough for consumer because the lines will be longer, which could be good news for e-commerce and the [technology company mobile wallets]."

In that way, EMV wait times are a blessing in disguise for mobile proximity payments and the omnichannel trend toward buying online and picking up in the store, Moeser said. "EMV has given the better user experience crown to mobile proximity and digital commerce," he said.

This could be the opportunity that "mobile is waiting for," said Andy Schmidt, an executive advisor at CEB.

"I would hope it would focus on mobile at the point of sale to clear up the log jam," Schmidt said.