News Feature | November 5, 2015

What Will EMV Cards Mean For Holiday Retail Transactions?

Christine Kern

By Christine Kern, contributing writer

Walmart EMV Holiday Prediction

Walmart exec predicts anarchy will result.

As the holiday shopping season quickly gears up, retailers are worried about how sales will stack up over last year.  According to some predictions, sales growth may be smaller in 2015. And an additional and unknown factor in this year’s holiday shopping experience is the shift to EMV cards.  Some caution that the new technology could just wreak havoc on the season’s sales, producing frustration and slower checkout lines at a time when shoppers want expedited service. 

Neil Stern, senior partner at Chicago-based McMillianDoolittle, told the Chicago Tribune, “The bricks-and-mortar retailers were already fighting an uphill battle against the e-commerce guys, so the last thing they need are more reasons for customers to be ticked off at them.”

And Wal-Mart senior director of payment services John Drechny, who has worked to transition the retailer to the new EMV cards, predicts that the new technology will create “anarchy” this holiday shopping season.  According to re|code, Drechney discussed the EMV shift during a panel discussion at the Money20/20 payments conference in Las Vegas. He believes that the October deadline for merchants to switch over to equipment that can accept new chip cards will cause chaos during the holidays.

In fact, Drechny asserted, “We’re forcing anarchy” on the payments world right now, predicting that shoppers will choose the easiest payment form at checkout to expedite their purchases, which means that they will be eschewing chip cards. Using the new chip credit cards requires more time at the register.

Drechny concluded that the EMV transition deadline was far too close to the busiest shopping season of the year, when checkout lines already are at their busiest, leaving retailers little time to deal with glitches in new technology and training seasonal employees.  Drechny also said that Walmart has been working diligently to cut down the added time it takes for a customer to use a chip card, and said that the company has been able to cut it down from 12 seconds a year ago to one second today.  However, he asserted, “Most merchants…are where we were a year ago.”

Of course, not everyone believes that the transition will be the Armageddon of retail. In a recent blog post, Glen Sarvady postulated that EMV is the Y2K hysteria of our day, observing that “Despite untold amounts of hand-wringing, so far the market reaction/disruption has been quite muted.”

Jennifer Miles of Verifone, also part of the EMV panel, pointed out that the “perfect storm” is approaching on Black Friday, which will be the ultimate test for the new chip-base cards that shoppers are currently receiving.

Sarvady concluded, “In short, while we’re not out of the woods yet there’s a decent chance that we’ll look back on EMV implementation as a necessary evil but essentially a non-event. The frustrating news is that given the required effort, the industry didn’t take the incremental steps to address other pressing matters at the same time.”