Anarchy Predicted by Walmart Exec Due to Chip Credit Cards
At the Money 20/20 payments conference, Walmart payments executive John Drechny warned that the new rules requiring retailers to accept chip-embedded credit cards will cause confusion and longer lines on Black Friday and throughout the holidays.
Drechny questions the timing of the new rules, which require all retailers to install and use processing equipment that accepts the new EMV chip credit cards, which are intended to provide additional fraud security.
While the cards are used regularly in other countries, the United States has been slow in adopting them, because retailers did not want to install new equipment if the cards were not in use. At the same time, financial institutions didn’t want to issue new cards if retailers did not have the equipment ready. To end this stand-off, the deadline of October 1 was set. After that date, any retailer that is not ready could be held accountable for fraudulent purchases.
Drechny is just one of many retailers who have objected to the timing. Since the changes were made so close to the holiday shopping season, the already-long lines will be made worse. In addition, both consumers and cashiers will be unfamiliar with the cards, so it will take longer to check out. Payment will be different because instead of swiping like a traditional card, many of the new chip credit cards need to be dipped rather than swiped into checkout equipment. The fact that so many seasonal employees are inexperienced will exacerbate the situation.
There will not be an impact on online sales, as users simply enter their card information manually.