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Wegmans took more than a year to roll out chip card readers. Here's why.

It took more than a year for Wegmans to let customers dip their chip cards when they check out.

But the company hopes the long delay in getting chip readers working will mean less time in the checkout line for customers.

Retailers became liable in October 2015 for fraudulent charges if they were not processed on a working chip terminal. Despite that deadline, many consumers are still swiping cards at stores that have not yet turned on the chip readers. Some stores, including Wegmans and Tops, are just now turning on the technology.

At Wegmans, the delay was related to efforts to reduce the amount of time each transaction takes.

"We wanted to take as long as necessary to complete what was a very complex programming effort," said Michele Mehaffy, a Wegmans spokeswoman.

Wegmans was among the first local retailers to install readers for credit and debit cards with microprocessor chips at its checkout lanes. Despite installing the terminals in 2015, the grocer didn't go live with them until recent weeks. All of the more than 3,000 chip readers across its stores will be operational next week after the company completed work on the software that runs the chip readers.

As it began making the transition from swipe to chip, Wegmans learned about Quick Chip technology, which reduces transaction wait time. Longer card processing times have been a chief complaint about the new chip technology, resulting in frustration for both retailers and consumers. The Quick Chip software shortens the wait by eliminating some prompts, removing a layer of verification and allowing the consumer to take their card out of the machine while the transaction processes. It brings the wait time down to just 3 seconds, from 15 to 20.

Visa, which launched the Quick Chip technology, has said the wait time for chip cards is the same as that for swipe cards. Waiting for chip cards just feels longer because, instead of swiping your card and then putting it away, you now have to stand and stare at the terminal, and you can't remove your card until the transaction goes through, Visa vice president Stephanie Ericksen, told Slate in July.

Consumers already consider checkout the "most painful" aspect of a shopping trip, so their impatience is amplified, according to Ram Bezawada, associate professor of marketing in the University at Buffalo School of Management.

"It's only a few seconds, but it feels like an eternity," Bezawada said. "I think it's a small price to pay."

Many Wegmans stores now have chip readers up and running, and those that don't will have them soon. Card readers that haven't gone live have signs inserted into their chip readers directing customers to swipe rather than "dip" their cards. It helps prevent another complaint about the shift to chip: the confusion at checkout about whether to swipe or dip cards with chips at chip terminals.

The point-of-sale terminal at a cash register at the Wegmans in Niagara Falls on Feb. 23, 2017. (Derek Gee/Buffalo News)

Tops Markets hasn't gone live with its chip readers yet, either. The grocer has been overhauling its front-end infrastructure and software since May, installing new Toshiba point-of-sale systems that handle high-volume scanning, coupon fraud detection and electronic marketing in addition to supporting chip cards. The previous POS systems were 20 years old.

"We have been integrating an entirely new and upgraded POS system at the same time we were implementing and testing our EMV readers," said Mike Metz, vice president of information and technology at Tops.  "This is a very comprehensive project, and we wanted to ensure that we did not provide any disruption to our customers."

The project, which began in May, was originally supposed to be completed in February. The company is in the testing phase and expects to have chip readers up and running "in the near future," Metz said.

Chip readers aren't cheap

Wegmans and Tops aren't alone in the slow rollout of chip card readers.

Why the delays? For starters, retailers have had to replace all terminals in their stores, to the tune of $500 each. That has been a burden for some mom-and-pop shops, and a major investment for corporate chains that may have thousands of terminals to replace. Software installation is complicated. And the final step in the process – having chip systems certified by banks and card networks – has been met with major delays.

Chip technology is designed to be safer than magnetic strip technology in terms of keeping payment information encrypted and preventing theft and fraud. But critics say the cards are not as secure as they could be. The cards are harder to counterfeit, but in cases of theft, the cards are just as vulnerable as swipe cards. That's because, unlike chip cards in the rest of the world, those in the United States require only a signature to complete a purchase. Elsewhere, a unique and secret four-digit PIN is required. Thieves here can still forge signatures and aren't stopped by the PIN security feature.

Still, chip cards are more effective at thwarting data breaches, which are considered a greater danger than individual fraud.

Bezawada says the wait for chip systems is worth the increased security for retailers and consumers.

"There are always some glitches when you make a transition like this but, in the long run, the new technology pays off," said Bezawada.

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