The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”

The U.S. Lags the World in Payment Technology

The question of whether the US lags the rest of the world in payment technology is very broad and fails to infer that US technology is actually behind in all aspects. However, retail payment processing is a huge market. It’s amazing that the US is so far behind other countries.

Most of us have the new, more secure credit cards with a chip, called EMV. Problem: Most retailers don’t have the updated terminals yet. It’s estimated that fewer than 40% have the proper equipment.

Is the US the first country to use these terminals? Don’t be fooled. The US is far, far behind the rest of the world.

According to a recent survey commissioned by, a nationally representative telephone survey of 932 credit cardholders found that 70% of US credit cardholders now carry an EMV chip card.

Here is a chart of EMV card usage globally, from EMVCO.


Here you can see how far behind the US is compared to other regions. For example in 2015, a miniscule 2% of all card-present transactions used cards with EMV. Usage in the US has grown significantly since October 1, 2015 when liability for some fraud shifted from card issuers to merchants who can’t accept the new card technology.

I remember that in Europe about 40 years ago, most recurring transactions were done automatically from one bank account to another, such as utility bills, salaries, etc. The simplicity was incredible and it took decades for US banks to catch-up.

Even today, if you use a “Bill Pay” service, many of the payments are actually ACH checks, which are physically mailed to the recipient. Sometimes it takes a week or two to arrive. This is like being in the dark ages again.

I was told by a bank that about 70%-80% of banks use the same Bill Pay company. You would think that banks would have entered the electronic age by now. Perhaps they should hire some programmers from Germany, Switzerland, or other European countries.

The US has the talent to invent products and lead the world. But we often lack the talent at the top of the executive ladder to implement those advances. As the Peter Principle says: “Managers rise to the level of their incompetence“.  That means that people get promoted until they no longer can do the job they were promoted to. And that’s where they stay.

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