OpenEdge Research & Development Group May 2015

Transcription

1 Pulse of the Market: Merchant Survey Findings on EMV Knowledge, Attitudes & Readiness OpenEdge Research & Development Group May 2015 openedgepay.com

2 Table of Contents Overview... 3 The Survey... 3 Executive Summary... 4 EMV Acceptance: A Snapshot... 5 EMV Familiarity... 5 EMV Preparedness... 6 EMV & Your Payment Partners... 7 A Half-Year Until EMV... 9 EMV Pre-Certified Solutions from OpenEdge

3 Overview The U.S will migrate to the EMV security standard late in The technology is based on a microprocessor (or smart chip ) that is virtually impossible to duplicate and will change the credit card payment experience. The payments industry is instituting a liability shift in which the party in the payments chain not offering EMV will be considered responsible if fraud occurs. Nearly all businesses accepting card-present payments will feel the impact of the switch. This survey, conducted by OpenEdge, explores: the current state of EMV acceptance, attitudes on the new payments technology, knowledge level, and information received from the payments industry. The goal is to understand, with a half-year remaining until the EMV liability shift, how prepared merchants feel and how the industry is equipping these businesses for the change. The Survey Between March 17 and March 31, 2015, OpenEdge surveyed 1,011 businesses, representing a wide range of industries and business models. All respondents accept card-present credit or debit card transactions and, therefore, will be affected by the impending shift to EMV chip cards as a payment standard. Respondent Business Sizes 1.5% = Large: 200+ employees 4.6% = Medium: employees 93.9% = Small: up to 50 employees Respondent Business Sizes 1.5% 4.6% 93.9% Large: 200+ employees Medium: employees Small: up to 50 employees 3

4 Executive Summary EMV Familiarity A very small percentage of businesses are presently taking EMV payments. Nearly 37% answered that they did not know if they were accepting EMV transactions, indicating a lack of understanding and education in the market. Furthermore, most merchants indicated they had little or no knowledge of EMV. This speaks to a critical need for the stakeholders credit card companies, processors, software providers and banks to adequately prepare merchants for chip card payments in the coming months. EMV Preparedness Responses from merchants, on their sense of preparedness for EMV, closely align with their familiarity. Only a small sample indicated it was prepared, while nearly two-thirds of respondents stated they were not at all prepared. Businesses accepting EMV payments will contend with new software, hardware and checkout processes. Payment stakeholders, therefore, will need to set merchants up and train them, in advance. Payment Partner Perceptions The majority of surveyed merchants feel their payment partners card brands, processors, banks, developers are not invested in preparing them for EMV. While large businesses were more likely than smaller businesses to indicate that partners were invested, only 12% of merchants, overall, answered that partners were very invested with nearly 40% stating partners were not invested at all. Marketing Information on EMV Much of the market confusion and merchant perceptions may be the result of the lack of EMV information being circulated. Nearly 90% of respondents say they ve received little or no information. Of the minority receiving information, nearly 94% of merchants did not consider the information they received helpful. Many respondents resorted to their own resources to prepare for EMV. Payment processors and credit card companies appear to be the most common sources of information. 4

5 EMV Acceptance: A Snapshot When asked whether they were presently accepting and processing EMV transactions, merchants responded as expected a very small percentage takes EMV payments; the majority is not. Larger businesses were more prone to accept EMV. I Don t Know Are You Presently Accepting and Processing EMV Transactions? I Don t Know = 36.7% Yes = 5% Surprisingly, nearly 37% answered that they did not know if they were accepting EMV transactions. That s a telling statistic, indicating a lack of understanding and education in the market. While the industry prepares to adopt smart chip cards as the card-present standard, it s clear that merchants have not been adequately prepared. At the time of this survey, only a few months remain before the shift. Many No = 58.3% businesses do not know enough about the technology to even understand whether they are using it. This speaks to a critical need for the stakeholders credit card companies, processors, software providers and banks to adequately prepare merchants for chip card payments. How High Expe Som Knowledge 26.0 ntly Accepting and V Transactions? Yes = 5% No = 58.3% EMV Familiarity Are You Presently Accepting and How Familiar Processing Are You With EMV EMV? Transactions? In this question, merchants had the opportunity to identify how familiar they Yes were = 5% with EMV. It supports the hypothesis that businesses are seriously under-prepared for the new security standard. Small businesses were 60% more likely than large I Don t businesses to indicate they Know = possess little or no knowledge of EMV. High Knowledge or Expert = 11.3% Some Knowledge = 36.7% 26.0% EMV & the Law Little or No Knowledge = 62.7% No = 58.3% EMV is not the law. EMV is the result of agreement within the payments industry, in which the liability for a potential card data fraud shifts to the party in the payments chain which did not offer the secure EMV payment option. For example, if EMV is made available by the processor or software developer, and the merchant opts not to accept the smart card payments, liability for a breach can fall to the merchant. To The Best of Your Knowledge, is EMV the Law? Yes = 24.1% How Familiar Are You With EMV? High Knowledge or Expert = 11.3% Some Knowledge = 26.0% Little or No Knowledge = 62.7% To The Best of Your Knowledge, is EMV Yes = 24.1% I Don t Know = 62.8% No = 13.1% I Don t Know = 62.8% No = 13.1% The vast majority of respondents, across all business sizes, answered this incorrectly or did not know, indicating misinformation or confusion in the market. Seemingly, businesses have some degree of awareness of EMV (it s a high-profile topic in retail circles), but have very little understanding of the details. 5

6 EMV Preparedness How Prepared Do You Consider Your Business for the Switch to EMV? Not at All = 62.8% A Little Prepared = 16.1% Somewhat Prepared = 15.1% Very or Completely Prepared = 6% Naturally, knowledge and preparedness go hand-in-hand. Responses from merchants, on their sense of preparedness for EMV, closely align with their familiarity. Only a small sample indicated it was prepared, while nearly two-thirds of respondents stated they were not at all prepared. Businesses accepting EMV payments will contend with new software, hardware and checkout processes. Payment stakeholders, therefore, will need to set merchants up and train them, in advance. While there is still ample time to get businesses prepared for EMV, the responsible parties will need to take the necessary steps very soon. As with any change, I am apprehensive. I feel that our business is totally unprepared to begin accepting these EMV cards and am hoping that we will be educated in time to purchase any new equipment and be prepared when the time comes. - Responding Merchant 6

7 EMV & Your Payment Partners This portion of the survey dealt with specific merchant attitudes regarding their payment partners and the information received on the topic of EMV. True or not, the majority of surveyed merchants feel their payment partners the card brands, processors, banks, developers are not (or marginally) invested in preparing them for EMV. Large businesses were 2.5 times more likely than smaller businesses to indicate that partners were very invested. However, only 12% of merchants, overall, answered that partners were very invested. Nearly 40% stated that partners were not invested at all while almost half of respondents said partners were a little or somewhat invested in preparing them for EMV. How Invested Do You Consider Your Payment Partners in Preparing Your Business for EMV? Not Invested at All = 39.4% A Little Invested = 22.3% Somewhat Invested = 26.6% Very Invested = 11.7% OpenEdge finds it difficult to accept that such a significant portion of the industry does see the importance of preparing merchants for EMV. Rather, there is clearly a disconnect between the useful information businesses receive and the intentions of their payment partners How Much Information Have You Received About EMV? Little or None = 88.1% Some 10.6% A Great Deal = 1.3% 7

8 Much of the market confusion and merchant perceptions may be the result of the lack of EMV information being circulated. Nearly 90% of respondents say they ve received little or no information. An insignificant number say they ve received a great deal of information. Among partners, payment processors and credit card companies appear to be the most common sources of information. Among Those Receiving Information, Who is Sending It Primarily? Payment Processors = 38.2% Credit Card Companies = 28.9% Banks = 14.8% POS Providers = 12.7% Hardware/Device Providers = 3.6% Other = 11.8% How do I become prepared for [EMV]? What hardware and/or software will I need? How will it change the way that I currently accept credit card payments? - Responding Merchant 8

9 Among Those Receiving Information, How Helpful Did They Consider It? 5.1% Helpful and Prepared 13.0% Not Helpful (business prepared on own) 81.9% Not Helpful (business not prepared) I would like to know how [EMV] is going to impact me and if I m going to have to make changes to how I do things. - Responding Merchant Recall that only a fraction of businesses were getting the amount of information needed on EMV. Of that minority, nearly 94% of merchant did not consider the information they received helpful. 13% of respondents resorted to their own resources to prepare for EMV. Our customers, who have the merchant accounts, ask us all the time what they have to do and when everything is going to be done. Getting information out that they can understand would be extremely helpful. - Self-Storage Industry POS Software Developer A Half-Year Until EMV These answers demonstrate, beyond a shadow of a doubt, that six months ahead of the EMV liability shift: Businesses are under-informed. Businesses are not prepared for EMV. Businesses do not feel that their payment partners are invested in getting them ready for EMV. 9

10 EMV Pre-Certified Solutions from OpenEdge It will be mandatory later this year and I m putting all my trust on my software developer and OpenEdge to make sure I m compliant. - Responding Merchant OpenEdge Has the Swiftest, Simplest Path to EMV EMV is the coming credit card security standard. This chip-based technology successfully deployed around the world will be common in the U.S. by year s end. The security benefits for developers, merchants and consumers will be significant: The EMV smart chip conducts a dynamic transaction, ensuring the same type of data is never sent twice, removing the opportunity for criminals to re-use card information. EMV cards are virtually impossible to counterfeit. Merchant staff won t handle cards as often, so sensitive information remains with the cardholder, resulting in fewer fraud scenarios and chargebacks. As a final barrier against misuse, cardholders verify the information by PIN or signature. Absolutely anything that will make my credit card transactions more secure is fine with me. My personal cards have been repeatedly swiped in more ways than one and I am over it. - Responding Merchant With benefits come challenges. Software developers planning to offer EMV payment options for their customers face complex certifications and device driving. The OpenEdge EMV solution, part of the EdgeShield security bundle from OpenEdge, insulates developers from much of the heavy lifting associated with offering EMV, while giving merchants the tools to accept the new payment method. EMV PA-DSS 3.0 Out-of- Scope Token Vault PCI ASSURE Point to Point Encryption Breach Reimbursement Guarantee for Developers 10

11 Benefits for Developers The OpenEdge EMV solution isn t simply a means to get your customers ready to accept EMV payments (it does that, too). Our solution offers a swift, simple way to offer EMV while avoiding the majority of certification work and technically complex device driving. Shields Developers from Certifications Developers are required to perform an individual Level 3 EMV certification for every device for every card brand. For instance a merchant requiring 3 devices and accepting the 4 major card brands will need 12 separate EMV certifications. New certifications are necessary any time the transaction process changes. Using the EMV solution, OpenEdge security professionals shield you from this expensive and time-consuming requirement. A single integration and you re done. Eases Complicated Device Driving While magnetic stripe technology comprises only 2 communications between the hardware and POS, EMV involves 12. OpenEdge easily handles this cumbersome hardware-software interaction. Swift Implementation OpenEdge reduces the development time associated with EMV. We ll get your customers ready for EMV swiftly and well ahead of the liability shift. Future-Proof Any new technology undergoes a period of adaption and experimentation, incorporating new features over time. Our EMV solution is sophisticated and feature-rich, incorporating trending technologies that will grow in acceptance: Near Field Communication (NFC), Apple Pay, tokenization, point-to-point encryption and more. Device Flexibility EMV and magnetic stripe technologies will co-exist for some time; merchant hardware will accept both transaction types. As consumers grow accustomed to payment on different platforms (smart phones, tablets, new mobile devices), we ll be ready. Ready. Set. Go. Once EMV terminals are in place, a simple software update enables your customers to accept payments with little effort on your part. How will [EMV] cut down on fraudulent changes? As a consumer and a merchant, fraudulent activity is a concern. - Responding Merchant 11

12 OpenEdge & EMV Experience OpenEdge is the technology innovation division of industry leader, Global Payments. They ve deployed EMV in countries around the world. EMV is familiar territory for the security professionals at OpenEdge. About OpenEdge OpenEdge helps software developers and businesses succeed by delivering secure and personalized payment solutions. As the integrated payments division of Global Payments, OpenEdge is driving innovation adapting, scaling and simplifying how payments are processed, across platforms and points-of-interaction, in an increasingly complex landscape. OpenEdge serves more than 2,000 technology partners across 60 industry verticals throughout the United States and Canada. openedgepay.com 2015 OpenEdge, a division of Global Payments, operates through the following entities: OEEMVCSB-SD TN Accelerated Payment Technologies is a registered ISO and MSP of HSBC Bank, National Association, Buffalo, NY, a registered ISO and MSP of Wells Fargo Bank, N.A., Walnut Creek, CA, and a registered ISO/MSP of Synovus Bank, Columbus, GA. Accelerated Payment Technologies, A Division of Global Payments. All rights reserved. Payment Processing, Inc. is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA; HSBC Bank USA, National Association, Buffalo, NY; and National Bank of Canada, Montreal, QC. PayPros is a registered trademark of Payment Processing. EMV is a trademark owned by EMVCo, LLC.