The Strawhecker Group (TSG), a management consulting firm focused on the global payments industry, released survey results that estimate 44%  of U.S. card-accepting merchants have EMV terminals. TSG also found that less than a month away from the anniversary of the EMV liability shift, 29% of U.S. merchants are actually able to accept chip-based transactions.

TSG’s previous survey of payment processors and other payment providers completed in January estimated that over 50 percent would have an EMV terminal by this time, showing a slower pace of implementation than expected.

“EMV merchant adoption has slowed down a bit, at least comparatively speaking to our last EMV survey results in January 2016,” said Jared Drieling, Business Intelligence Manager at TSG. Approximately one-third of merchants have activated EMV systems (ability to accept chip on chip transactions) despite the larger base of U.S. merchants with EMV terminals in place. “EMV terminal vendor supply and delays in the terminal activation/certification process are the bottlenecks in the migration,” says TSG’s Drieling.

By December 2016, it is estimated that consumers will be able to use their chip-based credit and debit cards at 51% of U.S. merchant locations. “It is also important to note that EMV adoption by merchant industry can vary drastically; for example, quick service restaurants are suspected to be laggards in the transition,” said Drieling.

The survey also indicated that over 60% of respondents have experienced an increase in the number of chargebacks due to a lack of EMV compliance. “It is clear that non-EMV compliant merchants have felt the impact of the liability shift,” says Drieling. “The good news is that as merchants refresh their terminals for EMV, they are also adopting the contactless capability which lays down the foundation for future payments such as mobile proximity payments,” Drieling added.

EMV is a globally accepted card standard that uses an embedded microchip to provide unique data protection when the card is inserted into a chip-card reader. EMV is an acronym for Europay, MasterCard, and Visa. After the October 2015 liability shift, U.S. card-accepting merchants without the ability to accept EMV cards may be liable for fraudulent transactions.

TSG’s sample included 79 payment service providers that service more than 3.4 million merchants, or nearly half of the U.S. card-accepting market.