If you think EMV is in our rearview mirror, you’re wrong—and missing out on a great revenue generator. Looking back, there was obviously a lot of hype and uncertainty in the U.S. POS and payments industries as we led up to the Oct. 2015 EMV liability shift. Many factors created a “Y2K-like” moment that passed with little fanfare. When the deadline passed, many retailers saw that there wasn’t suddenly more fraud or even enough to compel them to continue to act with urgency concerning EMV upgrades. However, unlike Y2K, just because your customers made it past the date in question doesn’t mean that they’re in the clear. Additionally, it doesn’t mean that EMV isn’t still a significant opportunity for you.
It took other markets such as Canada and the U.K. approximately five years to get their EMV upgrades completed. The U.S market is still in the first part of its upgrade cycle. Visa’s latest stats show that the U.S. market is just at about 39% conversion, leaving a big market opportunity — there are millions of dollars at stake. In fact, a report from research firm Technavio states that the global EMV POS terminal market is estimated to grow at a CAGR of 13.9% between now and 2020.
The great thing for VARs is that these upgrades really do need to take place—there’s a legitimate business conversation you need to have with your clients about risk. Fraud does exist and retailers and restaurateurs are getting hit with chargebacks that can cripple their business, not to mention a loss of trust from their customer base (which can have an even larger impact). Late last year, research firm Aite Group estimated that chargebacks worth a whopping $5.8 billion will be assessed to merchants in 2016.
There’s even speculation that the card brands could incentivize EMV upgrades by lowering rates for EMV transactions or, more likely, increase rates for non-EMV transactions. Either way, the stick being used to move the market to EMV could be getting larger, and it’s your merchants that will feel the pain.
However, this shift to EMV isn’t only about fear. During sales conversations, you should point out to customers that these upgrades don’t just enable EMV transactions and mitigate risk. Today’s latest payment devices offer additional features and benefits, such as NFC payments (Apple Pay, Android Pay, etc.), loyalty apps, cloud services, customer-facing ads, and more. Indeed, app developers have been busy creating all sorts of unique add-ons and services that leverage next-gen payment devices to increase sales for your merchants and create an immediate ROI for the upgraded infrastructure.
The reality is that these new solutions and capabilities that were once only available to large merchants are now available to smaller merchants as well. In an omni-channel world, small retailers need to leverage the latest technologies to remain competitive. Frankly, as their trusted advisor, you should be pushing your retail and restaurant clients to be ahead of the curve, rather than behind it.
Make EMV upgrades a key part of your sales focus for early 2017 and get your customers upgraded. Each upgrade is worth $500 - $1,000 in hardware along, which can create a nice little revenue stream for you. Once your customers have EMV in their rearview mirror, they can focus on being the best retailer or restaurant they can be, rather than worry about chargebacks and fraud. If you advised them properly, those upgrades will carry new functionality and benefits that will help their overall sales as well. That’s a can’t-miss opportunity for your business in 2017.