I was just wondering about this question when another retailer asked me “to swipe my card” instead of using my chip. An instructive lesson on how a massive change like this takes time(for starters, think of the millions of point of sale payment systems that need to be replaced).

From the Washington Post:

Why is the checkout situation so patchy right now?

To understand this, it helps to rewind to October 1. This was a key date in the migration to chip cards, also known as EMV cards. Essentially, as of that date, whoever had the outdated technology — either the bank that issued a card or the retailer that accepted it — would be held responsible for the cost of fraud. The industry called this the “liability shift.” As a result, many card companies, payment networks and others had been hurdling toward October 1 as a deadline.

However, many retailers ultimately ended up holding off on making the change because they were worried about the timing: The holiday season is the busiest time of the year for many, and they worried that activating chip technology during or right before that rush could confuse customers and, in turn, slow down checkout lines. So they put it off, preferring to take the risk of potentially being on the hook for fraud charges over possibly alienating harried shoppers.

The result was that there was a burst of chip activation before and around October 1, and then a long lull. You can expect to see retailers turn more attention to this now that the holidays are behind them. Also, experts said that some of the unevenness is simply because it’s still early days. There are 1.2 billion credit and debit cards that have to be reissued, and 8 million merchant locations that have to outfit checkout counters.

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Check out the NGPF Lesson on Pick A Payment Method to help your students compare the pros/cons of the various ways to pay.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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