In 2015, EMV technology was introduced to the American payments market. There was some apprehension on the part of both consumers and merchants about the widespread adoption and success of EMV chip enabled cards. But a recent study, released by Visa, shows that as of 2017, American consumers and merchants have overcome that apprehension and are broadly embracing EMV technology.
During the first year of widespread EMV rollout, just over 700,000 merchants were equipped and capable of accepting EMV chip enabled cards. Less than two years later, 2.3 million merchants are now EMV compliant, a 473% increase.
Another key trend in the explosive growth of the technology is the breakdown of debit cards with EMV chips versus credit cards with EMV chips. When the new card technology was launched in the United States, credit cards accounted for approximately 75% of these EMV chip enabled transactions, while the other 25% of EMV transactions were conducted with debit cards containing the chip technology. By 2017, debit cards with EMV chip technology accounted for 50% of the EMV chip enabled transactions.
Effectiveness of EMV Compliance
EMV technology, long popular in Europe, was unveiled to the American public in large part to help combat fraud, identity theft and counterfeiting. But how effective has it been in achieving those goals?
For merchants who have completed the chip upgrade, the dollar amount of counterfeit and fraud that they have faced has, as of March 2017, dropped by 58%. With half of the total number of US storefronts currently accepting chip cards, it stands to reason that the dollar amount of fraudulent transactions that merchants face will continue to drop as acceptance of EMV chip cards rises.
The Bottom Line – EMV Transaction Volume
Even when factoring in variables such as holiday seasonal sales spikes and economic fluctuations, there is no denying the ever-increasing volume of EMV chip card transactions in number of transactions, transactional value and payment volume. In December 2015, 230 million EMV chip card transactions occurred with an approximate value of $15.9 billion dollars. In less than 18 months, those numbers exploded to over 1.2 billion EMV chip card transactions valued at an astonishing $58.4 billion dollars.
The value of these transactions has nearly tripled in less than two years with only half of eligible merchants in the United States currently equipped to process such transactions. Therefore, it is reasonable to assume that, as more merchants embrace EMV chip card technology, these numbers will continue to grow.
As consumers have demonstrated, confidence in the enhanced security that EMV chip cards offer is on the rise. Therefore, it is time for those merchants who are not currently EMV compliant to develop a growth strategy that includes incorporating EMV compliance into their current payment processing solutions.