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EMV is your weapon!
October 7, 2013 by atm Atom — blogger, atmatom
For U.S. ISOs, taking a "wait and see" approach to EMV is a perfectly defensible strategy. After all, standards aren't finalized, processors aren't ready, issuers aren't rolling out chip cards in large numbers yet and we are still years away from liability shift deadlines which may prove to be fluid.
Throw on top of that the costs of upgrade or replacement, uncomfortable conversations with merchants, and a lack of additional revenue to offset the costs, and "defensible" becomes "no brainer." Or does it … ?
In the face of conventional EMV wisdom which cries out "wait and see," a number of U.S. ISOs have started to move. The majority of new retail ATMs are already being purchased with EMV card readers.
EMV upgrade kit order rates have exhausted supplies and already we are seeing lead times. Requests for consultative services are up sharply as ISOs begin to develop EMV upgrade plans. What is going on here?
The ISOs who are aggressively moving now have told us that they view EMV as a "once in a lifetime" chance to supercharge the growth of their businesses.
Interestingly enough, the ISOs who have already started implementing upgrade plans are not just the "big guys." And in general, the approach these ISOs have taken can be described as both defensive and offensive.
Rear guard defenseis the first step for ISOs proactively upgrading their own estates for EMV, locking down and extending merchant contracts in the process.
Merchants are often much more EMV-savvy than they're given credit for. In contrast with PCI and ADA, many merchants are facing the upgrade of not only ATMs but also POS and gas pumps.
While never easy or painless, proactive conversations with merchants about EMV upgrades can provide the incumbent with a decided advantage over potential rivals who have taken a "wait and see" approach to EMV.
Additionally, incorporating EMV upgrades into routine service calls and purchasing kits or trading in early for new ATMs at incentive pricing can significantly reduce the total cost of an EMV upgrade.
Moving now also reduces the risk of getting caught in the inevitable backlog of field service resources, upgrade kits and new ATMs as we approach liability shift deadlines.
Aggressive attack on competitor accounts is the second goal of the early movers.
While many merchant contracts contain evergreen renewal provisions and narrow opt-out timelines, a "wait and see" incumbent may be unwittingly providing the competition with as much as a 2-year window to poach accounts.
By proactively targeting merchants with EMV solutions, which might include upgrade kits or new gear, active ISOs are already on the move, taking advantage of the sedentary farmers.
As one early mover in Canada famously stated, "If you aren't actively upgrading your EMV terminals, I will be!"
A "wait and see" approach to EMV might seem to be the logical strategy for your ISO business. However, be aware that the wolves are already out there, hungrily eyeing your merchant sheep.
— by Daryl Cornell
This article has been republished from the Triton blog, atmAToM, with kind permission from Triton.
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