Sean Talks Credit: Slow EMV Credit Card Payments Could Get Faster

By Sean McQuay

The last time you checked out at the store, it might've taken a little longer than usual.

That's partly because the new EMV card readers -- the ones that ask you to insert or "dip" your EMV-chipped card, rather than swipe it -- prompt you to leave your card in the machine for several seconds. If you remove it before the machine buzzes, your payment could be declined. This sacrifice is made in the name of extra security, but security shouldn't have to be so slow.

"The added time is pretty substantial," writes one cardholder, Tom Beckett, of Santa Cruz, California. Grocery shopping on the weekend is especially time-consuming now, he added. "Aside from waiting in a seven-person line, you just spent six minutes waiting on a credit card dip reader alone."

The transaction times Beckett experienced may be exceptional -- from the moment you dip your card to the time you retrieve it, using the new EMV card readers usually takes about 20 seconds. But many can relate to his exasperation with the longer process, especially when you're a parent like me with kids pawing at the candy in the checkout aisle. And that's after you figure out whether you'll swipe or dip.

But this switch to EMV technology is opening the way to doing neither -- smoother transaction technology is available now, and more is in the works.

The side effects of more security

The U.S.'s shift toward EMV last October created a big incentive for merchants to update their point-of-sale systems to accept EMV-chipped cards, and for banks to issue chip-enabled credit cards to make payments more secure.

But consumers have noticed they're trading safety for time. One in 5 consumers said transaction time was their top concern when using an EMV-enabled credit card or debit card, according to a survey of 5,000 U.S. adults by point-of-sale system company Harbortouch.

And while I appreciate the extra security EMV technology brings, I'm less optimistic about the card-dipping transactions. Only about 37% of retailers have started accepting them, according to the most recent estimates from The Strawhecker Group, a consulting firm for payment companies.

That spotty EMV acceptance can make the wait even longer. When I go to pay at a store, I don't know whether I'll swipe or dip, even if the merchant has an EMV terminal, and making the wrong guess can be frustrating -- especially for someone like me, who covers credit cards for a living. Taken with the 20-second lag, it's a poor consumer experience.

The ideal payment process should be secure, fast and consistent. To get there, we have two strong potential fixes on the table: mobile payments and faster EMV payments.

Mobile wallets: Fast process, slow consumer adoption

Most of the new EMV card readers are also designed to accept mobile wallets, such as Apple Pay, Samsung Pay and, my personal preference, Android Pay. These payment methods are speedier than card-based EMV payments and just as secure.

They are slowly becoming mainstream: About 28% of smartphone owners surveyed said they had used mobile payments in the 12 months prior to the survey, according to a 2015 study from the Federal Reserve. Digital marketing firm eMarketer projected the value of mobile payment transactions to increase by 210% in 2016.

"There's somewhat of a perfect storm brewing," says Jared Drieling, a manager at The Strawhecker Group. "I think with the EMV process of having a consumer insert or dip that card, and the whole process taking a little longer, it essentially lowers the bar now for mobile wallets to take off."

Compared with card-based EMV transactions, mobile payments are much more efficient. With mobile payments, you don't need to leave your device in the point-of-sale terminal to make a purchase; you just wave your phone over the card reader and authenticate with a fingerprint.

Mobile payments offer EMV-level security, too. Apple Pay, Samsung Pay and Android Pay, which are supported by most EMV-ready card readers, use tokenization to protect your payment information, very similar to what the EMV chip in your card does.

But mobile payments also face a big hurdle: consumer adoption. It's an entirely new payment method, and, as I argued here, it comes with its challenges in terms of reliability and acceptance.

Faster EMV card payments on the horizon

People have been using plastic credit cards in the U.S. for decades. The easiest way to speed up transaction times, then, might not come with newer technology, such as mobile payments, but with improvements upon the plastic standard. And that's exactly what Visa is doing.

The payment network made headlines last week with the announcement of "Quick Chip for EMV," a new specification it's providing for free to other networks and companies that help speed up the system for everyone. Visa says the new technology will only require cardholders to insert their cards in the terminal for two seconds or less, a fraction of the time it takes now. The upgrade will also mean that you can dip your card while the cashier is still ringing up your purchase, a capability traditional magstripes have had for a long time.

The new system is a step in the right direction, especially if you aren't interested in switching to mobile payment. But is this a good long-term solution for a faster checkout process? Not exactly. It doesn't eliminate the need for you to insert and retrieve your card, and that's what makes the new payments so time-consuming in the first place. And you can't opt in to it; you'll have to wait for merchants to implement the technology. These card-dipping transactions, even when they're a couple of seconds faster, still make for a less-than-ideal consumer experience.

A frictionless future

Slightly inconvenient card-based EMV payments are becoming the standard, but they're just a starting point. In the U.S., the transition to EMV payments has given new payment technologies space to expand and develop. The fate of these technologies -- which ones succeed, and which ones fail -- rests almost entirely with you and me, the consumers.

You can stay with card-based payments, if the extra time to make a transaction doesn't bother you as much as it bothers me. Or, you can set up your mobile wallet on your smartphone. But I hope we get something better.

Right now, mobile payments are the fastest, most secure way to pay in the checkout line. But years from now, it might be something else -- maybe even a system that automatically bills you for your purchases when you exit a store, or one that lets you pay with your voice or a gesture. Recently, Amazon published a patent that described a process where a payment could be authenticated with a selfie.

For EMV payments, last October was never meant to be a deadline. The payments industry didn't change overnight. The migration is still unfolding and bringing new possibilities with it. Says Drieling of The Strawhecker Group, "Essentially, it's a starting line."

Sean McQuay is a credit cards expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards more effectively. If you have a question about credit, shoot him an email at The answer might show up in a future column.

Photo courtesy of NerdWallet.