Credit unions and other card issuers in three states have flocked to EMV chips for member cards in recent months, but other states are less apt to use the technology, according new research from N.Y.-based mobile-payments software company CardFlight.

Sampling hundreds of thousands of transactions processed through the company's system in all 50 states since the Oct. 1, 2015, EMV liability shift and through June 2016, CardFlight found California, New York and Massachusetts are now the most likely places merchants will encounter customers with EMV cards.

In those states, at least 76% of the cards presented to merchants in June had EMV chips, the study said. California took the top slot at 80%; New York and Massachusetts followed at 79% and 76%, respectively.

Card users in Oklahoma, Maine and Mississippi were much less likely to use EMV cards, though. The study found customers presented EMV cards in those states only 44%, 39% and 34% of the time, respectively.

Delaware, Idaho and Indiana were the most improved states in the study — the proportion of EMV cards presented to merchants there has jumped 25%, 23% and 21%, respectively, since February, CardFlight reported. Growth was most stagnant in Hawaii, Louisiana and Oklahoma; those states reported growth of 6% or less over that time.

Overall, however, EMV cards appear to be flowing heavily into the market. As of June, over 70% of the cards processed through the CardFlight payment gateway had EMV chips.

“Based on the run rate over the past six months, over 85% of the cards presented at CardFlight merchants will contain EMV chips by the end of 2016,” the report said.

Some card brands have gained significant ground in recent months, particularly American Express and Discover, the study found.

More than 90% of American Express cards presented at U.S. merchants now have EMV chips, the company said.

“More than other card brands, American Express has embraced the shift to EMV chip cards suggesting merchants accepting American Express have more incentive to upgrade to EMV acceptance solutions,” CardFlight noted. “Despite lagging behind other card brands in terms of overall EMV chip card issuance, MasterCard has made significant improvements since February, increasing the percentage of cards presented with EMV chips by 14% (as did Visa over the same timeframe). Discover, however, has made the biggest strides, increasing the percentage of cards presented by 17% from February to June.”

Many merchants still swiping

Even though the number of EMV cards appears to be growing steadily, many merchants are still processing them the old-fashioned way by swiping them, according to CardFlight.

As recently as June, merchants in the study processed just 46% — less than half — of the EMV cards presented to them as true chip transactions. That is an improvement from January, when just 19% did so, it noted.

“In October, the vast majority of EMV cards were being processed as swiped transactions by a ratio of 22-to-1. In the nine months since, as merchants have upgraded to EMV acceptance solutions, the vast majority of EMV cards are being accepted as true EMV 'chip-on-chip' transactions by a 2-to-1 ratio,” CardFlight explained.

Sixty-four percent of the company's merchants were EMV enabled as of June, up from just 29% in January and 5% when the liability shift occurred back in October. The company said it expects its merchant clients to process as much as 80% of all transactions as true EMV transactions by the end of 2016.

Instant Insights /

EMV Adoption Lagging in Some States

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