Payment technology in the U.S. is finally catching up with the rest of the world, as EMV chip-enabled terminals finally begin appearing at more and more retailers across the country. An Aite Group research report predicts that by the end of 2015, more than half of all point-of-sale terminals in the U.S. will be EMV chip-enabled.

Now the standard in Europe, Asia, Canada, and other places, EMV chip cards have been slow to come to the U.S. The cards, which use more secure technology than traditional magnetic stripe cards, require a compatible point-of-sale terminal in order to process payments. Most EMV cards issued in the United States are equipped with both a chip and a magnetic stripe so they can be used anywhere.

Merchants who switch to EMV chip enabled payment systems will be protecting themselves as well as their customers; when people use a fraudulent card to pay for a purchase, the store is subject to losses. Aite Group estimates that retailers could open themselves up to billions of dollars in fraud losses.

Large retailers are quicker to adapt to this new technology than smaller ones. The report said that two-thirds of small- and mid-sized merchants are aware of the need to switch to EMV chip technology. That leaves one-third who still needs to catch up in order to protect payment information, both for themselves and their customers.

Small businesses at risk

EMVelocity: Outlook for POS Re-terminalization and Mobile Payments consists of interviews with retailers, payment processors, and other key financial industry players. Some small business owners said they do not plan to implement EMV technology at all, due to concerns about cost and logistics.

Of the two thirds of small- and mid-sized merchants who know they need to upgrade their payment processors, 60% reported already switching to EMV payments. They are either finished implementing the technology, or are in the process of it. Eighty-six percent expect to be EMV-friendly by the end of this calendar year.

Aite Group estimated that there would be $3.6 billion in credit card fraud losses by the end of 2015, up from $3 billion currently. In October 2015, the burden of these losses will shift partially to merchants who have not upgraded to EMV payments. They are currently protected from these losses, which are absorbed by banks and card issuers.

Thad Peterson, senior analyst at Aite Group, said the increased pace of EMV adaptation is “good news,” but stresses that “every organization in the payments space needs to increase its efforts to educate and inform the merchant community about the importance of moving to EMV chips.”