U.S. merchants have been slow to adopt chip-enabled credit and debit cards, exposing them to liability for fraudulent transactions perpetrated with traditional magnetic strip cards, according to a new survey.

The Strawhecker Group (TSG), a management consultancy, found that only 37% of retailers were ready to process transactions with the EMV technology consisting of cards with a microchip. The microchip contains the data traditionally stored in a card’s magnetic strip. In October, the United States became one of the last countries to shift to the EMV standard to combat fraud.

TSG previously estimated in a survey completed before the shift that more than 40% would be EMV-ready by this time, showing a slower pace of implementation than expected.

According to TSG, the three biggest obstacles to EMV implementation are payment processor readiness — some big terminal manufacturers weren’t ready to roll out EMV-compliant terminals on Oct. 1 — gateway readiness, and technical staff resource availability.

“The major card networks have failed to get many mom-and-pop stores to understand what they have to do to be compliant, and even big-name retailers have struggled to find a cost-effective way to roll out new terminals,” Ars Technica reported.

Jared Drieling, business intelligence manager at TSG, said some merchants decided to delay their migration to EMV-compliant terminals “until the holiday season ended to prevent friction and confusion at the checkout line.”

“I suspect that many merchants that have delayed, especially merchants in higher risk categories, felt the impact of the liability shift last year and we’ll see them aggressively ramp up plans to migrate,” he added.

Over the past few years, large retailers like Target, Home Depot, and Walmart have spent more than $8 billion to install new card readers capable of reading the chips. TSG estimates that 50% of merchants will have EMV-equipped terminals by June 2016, but it also expects the U.S. won’t reach 90% compliance until 2017.

“Currently, terminals in the United States will accept chip-and-signature transactions instead of the more secure chip-and-PIN, so the full cost benefit of rolling out the new hardware may not come to fruition for several more years,” Ars Technica cautioned.

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