While new numbers released last week indicate the expected migration of fraud from in-store counterfeit fraud to online CNP fraud has begun, retailers continue to point the finger at issuers and the card networks as EMV implementation lags. A study from the National Retail Federation found nearly half of retailers have EMV terminals operating successfully in their stores. Of the 52 percent that do not, nearly 60 percent said they have installed the equipment but are waiting for certification by the card brands. The study likely is meant to bolster a class action lawsuit filed this spring on behalf of retailers seeking relief from fraud liability that shifted from issuers to retailers last October if they were not equipped with EMV-compliant POS systems.
“Disappointingly, the card industry has not provided enough personnel or other resources to ensure that certification happens in a timely manner,” wrote NRF General Counsel Mallory Duncan. “At this point, many retailers have had new chip card readers sitting next to their cash registers for nine months. Many large national chains have been certified, but midsize retailers are facing a long wait.”
The certification bottleneck, in addition to prompting a lawsuit, has delayed full implementation of EMV in the U.S. And, if the results of one survey are any indication, the shift from counterfeit fraud to CNP fraud has already started and could get much worse, even as efforts to streamline certification continue.