Ignoring the EMV Deadline
The EMV deadline was always optional, as long as merchants were willing to take on additional fraud risk. For one merchant, another upgrade took priority.
As a large furniture retailer in South Florida, City Furniture had to decide whether to move quickly to upgrade terminals and avoid the October 2015 EMV chip card liability shift, or stay on track with a process it was already engaged in for a mobile point of sale system in its showrooms.
It chose the latter, and now considers itself future proof and in a position to give customers an improved payment experience through an Ingenico mobile POS card reader and ipad-based payment system.
“At the time of the huge EMV push, we allowed the liability to shift to us as the merchant because we weren’t going to be forced into the deadline, knowing we had this mobile development forthcoming,” said Steve Wilder, chief financial and information officer for City Furniture.
City Furniture was able to get its back-end system partner IBM to sit down at a conference table with Apple Inc. in Cupertino more than a year ago to help design the best way for ipads to communicate with IBM equipment, Wilder said.
It uses the upgraded Ingenico RP750X mobile POS.
Many retailers likely felt the same pressure to either shift solely to EMV or hold out for something more robust, with some experimenting with mobile wallet apps and others simply trying to determine whether Near Field Communication or some other mobile technology made more sense.
The decision actually gets simpler with time, said Thad Peterson, senior analyst with Boston-based Aite Group.
“Every day that goes by, it gets easier to implement EMV as it gets more standardized and there are more solutions around to accommodate it,” Peterson said.
Many hardware vendors also saw the EMV shift as a way to introduce other new technologies as part of a single hardware upgrade.
Thus, a merchant that wanted to support mobile wallets with NFC or QR codes would be able to get EMV card acceptance as part of the same deployment.
City Furniture’s journey points to how “old school” the furniture industry can be in its payments and back-office networks if a retailer chooses to stick with legacy equipment, Peterson added.
“It’s also an indication of the chal-
lenges retailers face with omni commerce,” he said. “A new system can be elegant in the store, but it has to be linked very closely to what is going on with their online presence.”
For City Furniture, it was far more important to take a big step away from its current system and make the conversion to something future-proof than to simply have EMV bolted on, Wilder said.
“We wanted to move away from the green [POS] screen and dragging the customer back to a desk to be able to get information and for them to be able to pay,” he said.
The Ingenico reader and Bluetooth connected ipad will allow that, being small enough for sales staff to move around the showroom floor and accept magstripe, EMV, PIN debit and NFC tap-and-pay.
City Furniture will run up to 90 applications in communicating with backoffice IBM equipment and Mobilefirst apps, and is in a position to advance its omnichannel presence through Ingenico Group’s MPOS EMV software development kit and decryption web service.
Of critical importance is that the Ingenico software will allow the 15 City Furniture and 12 Ashley Furniture showrooms in South Florida to accept and decrypt the company’s private label finance cards and gift cards.
“We knew we didn’t want a bulky onepound sled [tablet] for this project,” said Chad Simpson, business and research analyst at City Furniture.
“Those get set down, and employees forget about using them. That would have been a complete failure for us,” Simpson said.
Rather, the company sought to “knock people’s socks off” with how sleek the operation was and how easy it was to initiate and accept payments in the store, Simpson said.
“We did not take any steps back in this process,” Simpson said. “We are taking all payment types now, and previously we only took magstripe credit and debit.”
Ultimately, City Furniture concludes it was in the right place at the right time. IBM and Apple, two fierce competitors, came together to work with the retailer, and not long afterward Ingenico released its mobile POS card reader and SDK.
City Furniture finally received its EMV certification in the summer of 2016. “The timing just worked in our favor. We were very fortunate,” Wilder said.”
“We weren’t going to be forced into the deadline, knowing we had this mobile development forthcoming,” said Steve Widler, chief financial and information officer of City Furniture.