A Walmart executive is predicting "anarchy" this holiday shopping season due to new rules in place requiring retailers to accept chip-embedded credit cards from consumers. The exec feels the timing of the rules, which went into effect Oct. 1, will cause confusion and longer lines at retailers on Black Friday and throughout the holidays.
Walmart payments exec John Drechny made his prediction at the Money 20/20 payments conference in Las Vegas. He questioned the timing of the new rules, which require all retailers to have installed and begin using new credit card processing equipment that accepts cards embedded with a special chip that provides additional fraud security.
The chip-embedded cards are used regularly in numerous other world territories, but U.S. banks had been slow to issue them due to the lack of retailers securing and installing the equipment to read and process the cards. Retailers, conversely, did not want to install the new equipment until the new card type was issued more widely and in use by more consumers.
To press the issue, credit card issuers settled on a deadline of Oct. 1 for retailers to begin using the equipment. If they missed the deadline, they will then be held accountable for certain types of fraudulent purchases they otherwise would not be responsible for.
Walmart's Drechny is joining a chorus of other retailers who object to the timing of the new system's implementation. With the deadline so close to the busy holiday shopping season, retailers fear consumers will be met with longer lines as consumers and cashiers unfamiliar with the new cards take more time checking out their goods. The annual addition of inexperienced seasonal workers in many retail stores during the holidays may only exacerbate the issue.
"We're forcing anarchy" as a result, said Drechny, who claimed that Walmart is more prepared than other, smaller retailers that are just now installing and getting to know the new system. No impact is expected on online holiday sales, however, because users simply have to enter their credit card information manually when ordering online.
