The Chip-Card Ninjas Weaning America Off Swiping

Getting the U.S. off magnetic stripes isn’t easy and could take years.

Every day, half a dozen people gather in an office in an old brick building near the harbor in Bristol, England. They each sit in front of an array of credit-card payment terminals scattered on their desks. For hours each week, they insert sample chip-based credit cards—mounted on paddle devices that look a little like fly swatters—into each terminal. Again and again and again.

“It’s very monotonous,” said Jeremy Gumbley, chief technology officer of Creditcall Corp. Added Joe Callaghan, who supervises the team. “They drink lots of coffee.”

What happens in this office is a small part of the monumental labor of switching the U.S. from old magnetic-stripe credit cards to the new chip cards, also known as EMV cards. (EMV stands for Europay, MasterCard, and Visa, the companies that created the chip standard.) The chip cards are resistant to forms of fraud to which the old magnetic stripes were vulnerable—so resistant, in fact, that companies have seen a recent surge of fraud as criminals try to burn through their old stolen credit-card data.

Almost a year after the official switch to chip cards, only a third of U.S. merchant locations accept them

The problem is that the new terminals, with a few exceptions such as Square, aren’t plug-and-play. For merchants, the switchover means not just paying to replace their old stripe-swiping terminals and buying software to use with them, but also getting the terminal/software combination certified as functional with individual payment processors—a procedure that can take months.

There are long waitlists of merchants trying to get their terminals certified, and the hardware and software—as well as communication hand-offs to processors and banks—don’t always work perfectly together. Almost a year after the official switch to chip cards, only a third of U.S. merchant locations accept them, according to MasterCard Inc. An additional third are somewhere in the process of switching over, according to payment expert Crone Consulting LLC. Thousands of stores around the U.S. currently have their terminals’ chip-card slot taped up as they try to achieve certification.

For smaller merchants, it’s easier to outsource the process. That’s where Creditcall, and other companies like it, come in.

There are now dozens of such firms, part of a huge new consulting industry that has grown up around helping companies implement EMV. Boston Retail Partners, for example, sends teams of consultants to retailers’ headquarters to assist their sales operations and training departments. Companies, such as Accenture PLC, help banks get their customers and merchants to use chip cards. And others, such as Creditcall, are helping merchants’ technology vendors get hold of pre-certified gear to accept chip cards.

Altogether, consultants and various helpers are booking $2.6 billion a year from helping merchants get EMV up and running, according to Crone Consulting. At Boston Retail Partners alone, EMV-related business has been doubling or tripling annually for the last two years, Perry Kramer, vice president and practice lead, said in an interview.

“It’s become a big business for a lot of firms. Because you really need expertise—because it’s very complicated—the rules are continuing to change, the vendors and banks are still figuring it out,” Kramer said. “It’s a full-time job, and merchants’ associates already have full-time jobs.”

A customer’s credit card with an EMV chip being scanned.
Photographer: Bryan Anselm/Redux

Creditcall’s employees are mostly recruited out of college; they’re known within the company as “EMV ninjas.” (Some even wear gray t-shirts with “EMV Ninjas” on the back.) They spend four weeks to nine months certifying each payment terminal model—testing various transactions, talking with payment processors about resolving issues, reviewing terminals documentation. Their goal is to get each payment terminal and software combo pre-certified with a particular payment processor, so a merchant buying it can simply install it and start accepting chip-based credit cards and debit cards right away.  But not every merchant can use such an off-the-shelf setup. 

“I would say that almost every retailer’s implementation is slightly different,” said Kramer, whose teams of up to four consultants work on as many as 12 projects at a time. “And that’s making a lot of implementations very difficult. Most retailers have systems that are 5-12 years old, and they don’t want to replace the whole system just to get EMV working. In many cases, we are trying to get those legacy systems working with that technology.”

The problems don’t end there: Many retailers report that chip terminals take seven to eight seconds longer to process each transaction, as compared with magnetic stripe. During rush hours and the holiday season, delays can result in lost sales as frustrated customers leave stores rather than stand in long lines. Consultants often come in to train sales associates on techniques to get the lines moving faster.

“Five years from now, we’ll probably look at [EMV] as the biggest mandated waste of money and effort.”

Another boon for consultants: The EMV technology keeps changing. Retailers are moving to accept contactless payments made with phones or contactless chip cards, for example. And some tweaks and changes may require recertification of their setups. Oh, and terminals manufacturers will need to re-certify core software every three years.

“This is like painting the San Francisco bridge, you get to the end and you have to start again,” Gumbley said. He expects that his ninjas will have work for years to come.

Daunted by the cost and complexity, many U.S. businesses are delaying moving to EMV altogether. During its Sept. 1 earnings call, terminals vendor VeriFone Systems Inc. warned that small- to mid-sized businesses in particular are delaying changeovers, partly because Visa Inc. said in June that small transactions aren’t subject to chargebacks, Some of these small businesses simply buy Square Inc.’s attachments, which are able to accept chip cards.

“Once you get Square, you are ready to go,” Jesse Dorogusker, hardware lead at Square, said in an interview. “It just works, and it’s expedient and a super-clean experience. We are seeing better growth among bigger businesses. The experience customers have with our product is totally uneventful.”

What’s more, many businesses believe that EMV—which is two decades old—will be leapfrogged by another technology: mobile payments. And they are hoping to wait it out.

“Five years from now, we’ll probably look at [EMV] as the biggest mandated waste of money and effort,” Richard Crone, chief executive officer of Crone Consulting, said in an interview. “Where in history have we ever taken a 20-year-old technology when we are on the cusp of something new, like mobile payments, and forced retailers to take a giant step backwards?”

Still, EMV consultants aren’t worried: They believe they’ll have plenty of work to do in the next few years.

“It’s been consistent,” James Burroughs, a managing director at Accenture, said in an interview. “We see continued demand for our services.”