‘I Need Knowledge:’ Merchants Express Befuddlement About EMV, Breaches, System Issues

Merchants would like nothing more than to decipher what they call the “mysteries” of the payments universe, a select group of them told attendees Thursday at the Western States Acquirers Association conference in Scottsdale, Ariz.

These mysteries, they said, include knowing whom to call when a problem crops up, what to know about EMV chip cards, and how to protect their point-of-sale systems from hackers.

For merchants, much of the mystery is wrapped up in the problem of how to avoid juggling payments issues while also trying to manage a retail business. “We don’t want to think about it,” J. Brandon Maxwell, president and chief executive of M Culinary Concepts, a Phoenix-based catering business, said of payments. “We don’t want to be burdened by it.”

For Jim Buhr, chief financial officer and chief information officer at Bashas’ Supermarkets, a Chandler, Ariz.-based grocery chain, knowing what’s going on with payments is a constant attention getter. “If we’re down for an hour we can lose millions,” Buhr told attendees. The chain’s payment system did indeed fail for a few hours in August, costing the company $1 million in sales, some of which was not recoverable, Buhr said. Seventy percent of its overall transactions are made with credit, debit, or electronic benefits transfer cards.

When something like that happens, or when there is a breach, the merchants agreed they need someone to help them understand what happened and how it can be corrected.

For many merchants, like Michelle Simpson, controller and chief financial officer at Thunderbirds Charities, a charitable organization that distributes funds raised by the Waste Management Phoenix Open golf tournament, her merchant-sales provider is the go-to resource. “We want to have the best experience for our customers,” Simpson said. “We have huge payments coming in the lead-up to the Open. When the Open hits, people want to instantly use their credit cards for $20.”

Buhr discovered which payments organizations could help him in the aftermath of a data breach that occurred a few years ago. “You don’t really find out who can help you until you have a breach,” he said. Contacting the card brands and processors Bashas’ Supermarkets used yielded little aid until a fraud expert at First Data Corp. guided him.

Merchants also are perplexed by the lack of a unified message about EMV adoption from the payments industry.

“The chip has always confused me,” Maxwell said. His business usually involves a contract covering a large upfront payment, and secondary payments in a workplace café. “I know where that person works,” he said, alluding to employees patronizing the café. “All I care about is the speed of transaction on that second type of transaction. If chip ever becomes the rule, it needs to become a hell of a lot faster.”

Others have been more proactive about chip enablement.

“I spent millions of dollars and I get chargebacks,” Buhr said. Bashas’ Supermarkets achieved 100% EMV enablement in July, and installed the terminals in 2014 while it waited for its payments vendors to be EMV-certified. “It’s very important that we work together,” he said. “I ask the industry to start with the retailer. He’s the guy who eats it all,” referring to the costs of implementing EMV.

“What is frightening is this chip business,” said Kerry Dunne, principal of R Entertainment, a Scottsdale, Ariz.-based event-production company. “We have to get our customers in and out in seconds,” he said. “One fear we have is chip takes so much longer to process.” Impatient consumers, especially when they’re at an entertainment event and just want to grab a beer and return to the event, won’t like waiting for a chip transaction, Dunne said.

He too admitted he knows little of how payments work, calling it a “mystery.” His advice for the payments industry is to do a better job educating merchants. “I need knowledge,” Dunne said.