American Express has announced the launch of Amex Quick Chip, a software platform that accelerates chip card transaction times and removes the friction in the card payment process.
When shoppers dip an EMV card into a machine, the transactions can take 10 to 20 seconds to complete, significantly longer than the time it takes for the traditional swipe. Quick Chip speeds up this process by letting users remove their card while the terminal is still processing.
Merchants can start using Quick Chip after a simple software update to their point-of-sale (POS) terminals.
MasterCard and Visa have announced similar systems, and Quick Chip will be compatible with the tech standards necessary for the two companies’ processes, which means merchants would be able to adopt all three.
Quick Chip should eliminate most of the problems merchants and shoppers have experienced during the transition to EMV, most notably longer lines, angry customers, and abandoned cards, all of which could lead to $3.2 billion in additional labor costs for retailers. If Quick Chip solves these problems, it would increase EMV terminal adoption and in turn reduce fraud.
Amex also provides an attractive solution because approximately 88% of Amex cards processed by CardFlight in February had chips installed. This means the vast majority of Amex cards merchants accept have chips, so it would behoove them to adopt a system that reduces lines and takes advantage of this fact.
Amex’s processed credit card volume was second only to Visa in the U.S. in 2015, and the big three companies processed a combined $2.7 trillion in U.S. credit card payments last year. All of this means Quick Chip could become the rule rather than the exception at terminals.
A better EMV experience, though, would have a negative effect on mobile payment providers. EMV helps mobile wallets because it creates delays that cause people test mobile wallets for a faster checkout. But if the EMV experience improves, then cardholders would likely still continue to take out the plastic, which would slow the adoption of Apple Pay and its peers.
Fraud cost U.S. retailers approximately $32 billion in 2014, up from $23 billion just one year earlier. To solve the card fraud problem across in-store, online, and mobile payments, payment companies and merchants are implementing new payment protocols that could finally help mitigate fraud.
John Heggestuen, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on payment security that looks at how the dynamics of fraud are shifting across in-store and online channels and explains the top new types of security that are gaining traction across each of these channels, including on Apple Pay.
Here are some of the key takeaways from the report:
In full, the report: