Home > Credit Cards > Chip & PAIN? Some Cardholders Frustrated With Slow Transition

Comments 2 Comments

After about a month of inserting instead of swiping their plastic payment cards, many American consumers have strong opinions about the launch of chip-enabled credit and debit cards. While some are frustrated that chip transactions take a little longer than the old magnetic stripe purchases, they are far more worried that merchants have been sluggish to convert.

“The orange home improvement guys have theirs working. Everywhere else, I find the same among corporate retailers in Denver, insert doesn’t work, told to swipe,” wrote Christopher Toliver in a typical refrain on my Facebook page.

Rob Douglas, an ID theft expert who lives in Steamboat Springs, Colo., was a bit more forceful in his criticism.

“Almost none of the merchants in our small resort community have installed them,” he said. “Key word, resort. Resorts are famous for high levels of identity theft, and Steamboat is no exception. So, if any place could use them, it’s here. But most merchants tell me they’re too expensive.”

Chip-enabled credit cards — known as EMV cards — have been available to consumers and merchants for some time, but a shift in liability for fraud kicked in Oct. 1, making that date a serious deadline for conversion to the new payment cards. It was a deadline many merchants missed. While there haven’t been any widespread glitches associated with the changeover, there’s a lot more change to come. In September, The Strawhecker Group released survey results showing that only 27% of U.S. merchants would be EMV-ready by October — down from an estimated 34% in March.

That leaves consumers holding new chip cards as the payment equivalent of being all dressed up without a date.

A Big Expense for Small Businesses

In testimony before Congress earlier this month, the National Retail Federation essentially said, “Don’t blame us” for the slow uptake. New point-of-sale terminals for accepting chip cards cost up to $2,000 each, and that’s a bitter pill for small businesses to swallow, it said.

“The EMV transition is overwhelming and expensive for an independent, small retailer,” said Keith Lipert, owner of The Keith Lipert Gallery, a single-location, three-employee store in Washington, D.C. “Small retailers are entirely at the mercy and whims of the big players. We have no say and no way to use the marketplace to make our objections heard and our concerns valued.”

Consumers reacting to the delays weren’t particularly sympathetic to that. Many stores have chip-reader hardware, but haven’t updated their software yet, said reader Michael Ryan.”

“Get the … reader before the deadline, but take (your) sweet time activating the chip side,” he lamented. ”While hackers try new ploys to grab more data off the cards with chips too. This will just start the cycle all over again.”

There are a few complaints about the cards causing checkout line delays — it can take up to an extra 15 or even 20 seconds for a point-of-sale terminal to read an inserted chip card vs. a fairly instant swipe read.

“Most retailers don’t even have the chip reader turned on. When they do, it takes way too long. I always opt to just run it through the old way,” said Bree Biagi.

On the other hand, Lisa Ladonski didn’t mind the wait.

“The only problem I’ve had is that it takes a little longer for my card to be read. To be honest though, if it means my account is safer, I’m fine with that,” she said.

Randy Vanderhoof, director of industry group EMV Migration Forum, said a few bumps were to be expected, but he expected smoother sailing soon.

“The U.S. payments system is large and complex and we are still in the early days of the transition to chip payments,” he said. “There has been tremendous progress — card issuers are continuing to get cards in consumers’ hands, while retailers are making progress installing and enabling their terminals to accept the cards. As a result, the number of chip-on-chip (a chip card on a chip terminal) transactions are increasing rapidly and this ramp-up will continue through the holiday season and into 2016. It will likely be several years before we reach full implementation, though.”

But What About the PIN?

There is one universal complaint among consumers, however: That the U.S. took a half-step to chip and signature rather than a more secure leap to chip and PIN (personal identification number) technology. And there is also some complaining about…the complaining.

“Only in America would something as tragically simple as chip and PIN be so much trouble for people,” Amy Miller wrote.

To avoid any confusion during the transition, Vanderhoof said consumers should always swipe their cards first if there’s any doubt that a store’s chip readers are working.

“To reduce confusion during the transition, consumers with chip cards should swipe their cards as usual if they aren’t sure whether the retailer accepts chip cards, and follow the terminal prompts. If the retailer accepts chip cards, the terminal will instruct them to insert the card instead and guide them through the transaction,” he said. “If the consumer knows that the retailer accepts chip cards, they should go ahead and insert the card first; the terminal will guide them through the rest of the transaction.”

More on Credit Cards:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Commenter

    I carry one debit and one credit card, and often it’s not my choice which one I use, but which one that works with the implementation at the site I’m paying at. For example, if their implementation is for a chip and pin, but the machine is located somewhere where I can’t use the pin, I have to use the other card, or cash

  • Abe Manhattan

    The new chip system is WAY too slow. This is a major step backwards. It just encourages people to go back to cash. Who’s bright idea was this? Now we need to wait 1/2 a minute each time for the transaction to complete. What a drag.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team