Evan Schuman's StorefrontBacktalk

Getting rid of payment cards’ aging and insecure magstripe is the real point behind the recent EMV mandates of Visa, MasterCard and Discover. Trouble is, those mandates won’t work if they merely require PIN pads that support contactless and contact EMV cards. Such PIN pads are already in many stores, and they give customers three separate ways to use their cards. And yet, customers overwhelmingly use the most familiar approach: the magstripe swipe.

There’s an easy way to overcome that customer (and cashier) inertia: a redesigned PIN pad that doesn’t feel much different to customers but still makes swipes obsolete.

What Visa says it wants is a POS system that doesn’t just accept magstripe, contact and contactless cards, but one that also figures out which approach accepted by the card processor will provide the highest available level of security. To do that, the card has to somehow signal to the PIN pad that it’s contactless, or that has an EMV chip, or that it only has a magstripe. That’s going to require lots of PIN-pad upgrades for retailers.

Unfortunately, once Visa and MasterCard have their way getting chains to do those upgrades, PIN pads will probably still look to customers much like they do today: The customer can tap a contactless card. The customer can insert a contact EMV card into a slot, typically located at the bottom of the POS device. Or the customer can slide the card through the magstripe reader along the top or side of the POS device.

What’s wrong with this picture? If you give customers (and, even more crucially, your associates) three different ways of using a card, they’ll choose the one that’s most familiar—and that’s always going to be a swipe. (Well, except for that tiny minority of customers who prefer a tap or tourists who only know Chip-and-PIN.)

So much for the idea that the POS can figure out which approach is the most secure.

But wait—let’s say extra information is embedded in each card’s magstripe to indicate what else it supports. Then if customers swipe by habit, the POS can indicate that the card could be used in contact or contactless mode. All that would require is for the cashier to explain that the customer needs to either tap the already-swiped card or put it into another slot. Then the cashier would have to explain why the customer should do that unfamiliar thing, especially when the customer knows the swipe worked.

Considering that a lack of cashier interest has been a big part of the failure of contactless at POS, how likely is that scenario to play out? As long as the three-way choice is there, customers will always pick a swipe.

The obvious solution: Only offer customers a single slot to put the card in.