As we approach the one year anniversary of America’s switch from magstripe credit card readers over to EMV chip cards, the track record for them is not good. In fact, as I complained back in July, the entire technology stack is bad, slow, user hostile, and annoying. I still believe that the lion’s share of the blame can be laid at the feet of credit card companies. They put the burden of switching to the new system on businesses without doing enough to help them make the switch.
The new chip cards are more secure, even though most US retailers aren’t using PINs as a second security factor. But the tradeoff for that security is point-of-sale terminals that are slow and usually have annoying beeps — assuming they work at all and aren’t covered in "No Chip!" duct tape.
Inside all that hassle, Square sees an opportunity. It created a Bluetooth chip card reader that also supports contactless payments for the likes of Apple Pay and Android Pay some time ago, and today it’s announcing that’s it’s reduced the speed it takes to finish a transaction from 5.7 seconds down to 4.2 seconds.
That’s still longer than it ought to be, and Square says it’s committed to getting the average transaction time down to three seconds.
The reason chip cards take so long is because they require a lot more computation and communication. Jesse Dorogusker, Square's head of hardware, says that those little chips are essentially computers that need to be booted up, then communications with the reader need to happen, then it needs to be sent up to the bank and back down again. The whole stack, he says, is "chatty."
To reduce the time, Square did what it could to make it less chatty. Dorogusker couldn’t point to a single thing that Square did to reduce the transaction time, but instead said that the firmware update his company is delivering changes a little bit of everything in that stack.
But though Square is doing its best to make a better card reader, there is a limit to what it (or any company) can do to speed up chip card transactions. The standards set by EMV mean that point-of-sale terminals are only one part of the slow transaction chain — the rest will be dependent on network speed and the processing speed at the banks which approve your purchase in the first place.
Square isn’t the only company trying to speed things up. Earlier this month, Bloomberg had a great piece about the companies that are testing the new EMV terminals — offering their services up to retailers who are understandably bamboozled by the new systems and their technical requirements.
Eventually, all this pain will go away — in the meanwhile, we’ll be stuck waiting and getting annoyed with these systems and getting annoyed with ourselves for being so frustrated by such a small thing. A couple of seconds here and there shouldn’t cause that much angst, but of course they do.
Even though the EMV system isn’t built to make it easy to resolve, there is a system that’s much faster and easier. Paying by phone. It’s going to be a race to see which system can gain wider adoption by retailers here in the US — one which lasts something less than 4.2 seconds per transaction.