Credit card fraud reduction via EMV is the top payment issue for 2016

According to a new study by the National Retail Federation and Forrester that surveys CIOs and technology executives at 59 large and mid-sized retail companies, retailers are also busy with new data security enhancements such as point-to-point encryption and tokenization to better protect payment card data.

The State of Retail Payments 2016 study also found that EMV adoption has been hampered by bottlenecks throughout the US payment system and that the emphasis on security has pushed aside other priorities such as mobile payment.

When asked to name their top three payment challenges of the past year, 76% of retailers surveyed cited EMV as the top contender and 46% cited chargeback issues often related to EMV, while 37% pointed to implementation of security efforts like encryption and tokenization. In response to these challenges, 86% of retailers surveyed have implemented or expect to implement the new Europay MasterCard Visa chip card system by the end of 2016.

Since EMV is intended to ensure that the card is not counterfeit but does not directly protect card data itself, retailers are working on other steps that protect card data when it is being transmitted between the retailer and card processor or stored in retailers’ computer systems. The study found 93% of retailers surveyed expect to have point-to-point encryption in place by the end of 2017 and that 61% expect the same for multichannel tokenization.

With attention focused on security, retailers are taking a measured approach to new forms of payment such as mobile and digital wallets, with only 17% citing it as one of their top issues for the year. Near-field communication used by many mobile payment systems is built into most EMV terminals, so 72% expect to be equipped for NFC by the end of 2017. But 68% plan to accept only one or very few types of digital wallets rather the half-dozen vying for acceptance.

Of the major players in mobile and emerging payments, 76% of retailers plan to accept Apple Pay by the end of 2017, compared with 59% for PayPal. Others face an uphill battle, with 53% saying they have no interest in Venmo, 43% not interested in Alipay and 38% with no interest in Pay With Amazon.