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‘BWANMNP!’ alarm reveals how strange chip cards remain

Sienna Kossman

Just because someone has an EMV chip card doesn’t mean the cardholder or the cashier processing the transaction know how to use it. Over the past year cardholders have begun to receive EMV cards, which are designed to prevent counterfeit fraud, leading up to a nationwide payment technology migration deadline this October.

My boyfriend, Steven, is among them. A few weeks ago he and I were checking out at Target. He decided to use his new Amazon.com Visa as payment. The cashier told him to swipe, so he did, which set off a beeping noise emanating from the point-of-sale terminal that was so loud it nearly scared the pants off us all.

You know that “BWANMP! BWANMP! BWANMP!” noise anti-theft devices make when you walk out of a store and a security tag was accidentally left on one of your purchased items? Yeah, that obnoxious sound …

emv issuance vs educationFlustered and red in the face, the young cashier asked Steven to see his card. One glance at the card and he said, “Oh! That’s one of those new cards. You have to put it in the bottom.”

Confused, Steven examined the terminal. I pointed to the slot at the bottom of it. His new credit card has an EMV chip, and the cashier was asking him to “dip” it. Sure enough, the machine took the card, held it for a few seconds and ejected it, making the same frighteningly loud noise as before. Our transaction was catching many Target shoppers’ attention by this point and even though I knew nothing was seriously wrong, I was starting to feel a bit embarrassed. Just an EMV transaction, nothing to see here, folks.

Steven asked if the payment worked and the cashier kid (who was still a tad red in the face) said, “Uh, yeah. Looks like it.”

So we went on our way. Steven, still perplexed, asked me what that was about. I briefly explained what chip cards do and asked if he’d received information about the technology when he got his new card. He didn’t think so and if he did, it wasn’t memorable.

As it turns out, Steven is not be the only cardholder who has been left in the dark when it comes to understanding the new chip cards.

A June 2015 report from Javelin Research & Strategy revealed that even though consumers have started to receive EMV chip cards in the mail to replace their old cards, not everyone knows what exactly the chip in their new card is or what it does.

To get an idea of how many consumers have received an EMV card and are aware of the technology change, Javelin asked 8,500 U.S. retail bank customers the following three questions:

  • In the past 12 months, have you received a credit or debit card from your primary bank that has a chip on it?
  • Has your bank explained what the chip is for?
  • How has your bank explained what the chip is for?

Based on responses, 16 major banks were ranked by the percentage of their primary customers who said they’ve received an EMV card in the past year. Citibank was the leader, with 41 percent of customers saying they’ve received a chip card so far, follow by 36 percent of Bank of America customers, 25 percent of Chase’s and 22 percent of BBVA Compass’. Consumers of the remaining 12 banks reported 12-20 percent EMV card issuance.

On average, only about 19 percent of cardholders said they had a new chip card when the survey was conducted at the end of 2014.

Of the customers with EMV cards, 63 percent said their bank explained the purpose of the new chip cards. However, banks that have issued the most EMV cards so far aren’t necessarily the best EMV educators.

For example, Citi leads the way in EMV card issuance, but only 62 percent of its chip card-holding customers say they received educational materials about it. Other banks lagged further. Only 13 percent of Regions’ primary customers reported getting an EMV card and then only 35 percent of that small portion said they were educated about EMV.

On the other hand, even though only 22 percent of primary BBVA Compass customers said they received an EMV card, 81 percent of recipients said they’ve been educated about the technology.

Overall, there’s a dramatic difference between banks’ card issuance and the effectiveness of their EMV marketing and education efforts.

If banks want to increase EMV educational efforts, Javelin’s research found that text messaging may be the most useful tool. Print materials sent with the new card are the most common educational method used by banks, according to 47 percent of survey respondents. Only 7 percent said they learned about EMV via text messages, but Javelin found a strong correlation between those who said they received texts about their EMV cards and those who reported strong awareness of EMV overall.

Maybe if Steven had been texted by his card’s issuer, our Target transaction would have gone smoother. I looked through Steven’s new cardholder papers when we got home and found a little EMV information, but if you didn’t know anything about EMV technology to begin with, it wouldn’t be enough.

With just a few months to go before the EMV liability shift occurs for card issuers and merchants, it seems like banks have a little work to do in terms of upgrading card portfolios and educating customers.

Even if merchants aren’t totally prepared for the EMV shift in October, consumers should be. If you’ve received a chip card and aren’t sure what the deal is, call your issuer and read our EMV FAQ. After all, this technology upgrade is supposed to help protect consumers’ sensitive information. Let’s make sure we are all on the same page and encourage payment and retail entities to do the same.

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