Merchants and cardholders alike have been challenged by the perceived additional time to complete the EMV transaction. These concerns pushed both Visa and MasterCard to create a response to improve the speed of transacting:
The idea behind these efforts is that instead of keeping the card inserted in the POS terminal until completion of the transaction, the cardholder will be able to insert and quickly remove the card, similar to swiping in the old mag stripe environment. New software, downloaded by the merchant, will process the authorization/final transaction amount without affecting other EMV functionalities like automatic transactional counters.
But will it really speed up checkout time?
Both Visa and MasterCard say the Quick Chip and M/Chip Fast, respectively, allow cardholders to remove their card prior to final authorization of the transaction. However, it is too soon to tell whether merchants will let the consumer out of the store before the authorization comes back with an approval or denial of the transaction. It seems unlikely most merchants will be willing to take that chance.
The new card network options do not require the financial institution to reissue cards, and merchants do not have to re-certify their point-of-sale terminals. Visa and MasterCard are in the market ahead of American Express and Discover. However, we should expect these two issuers to follow suit as the environment moves in this direction over the next few months.
Alignment in the payments industry is important. We are beginning to see this more and more with the coordination of the EMV liability shifts and alerts notification requirement among all of the issuers.
The end game, as an issuer or cardholder, is to have a card that provides consumers with the ability to process a secure transaction in a timely manner. Players need to stay attuned to actions these card brands may take while tracking how merchants are integrating the new software. Keeping current on new opportunities like Quick Chip and M/Chip Fast or the discussion around other EMV developments is the smart move.
Arthur Harper is the director of card payment solutions at PSCU.
