Mobile Commerce Insider Featured Article

December 17, 2014

US Payment System Migrating to EMV Chip Technology

While the vast majority of countries around the world have switched to EMV, the acronym for EuroPay, Mastercard, and Visa, the three companies that developed the technology, the U.S. has been one of the few holdouts. However, recent data breaches resulting in the theft of tens of millions of credit and debit card information has persuaded businesses in the country to migrate to EMV. Additionally, mandates by President Obama and the Payment Card Industry Data Security Standard (PCI DSS) version 3.0 formally going in to effect on Jan. 1, 2015 also have pushed retailers in the U.S. to finally join the rest of the world. A new infographic by the EMV Migration Forum titled, “EMV Chip Cards: The Future of Payments” highlights some of the data points of this payment platform as the New Year rolls in.

One of the reasons for retailers not adopting EMV was the cost of investing in the technology, even though it was the future and it has many upsides. This has led card companies such as American Express to deploy incentive programs with partial funding for the terminals, with as much as $100 for each retailer. But even this wasn’t enough, and the final push was the fact that 600 million new EMV chip cards are expected to be in the wallets of American consumers this coming year.

As consumers become more aware of the EMV technology and the security measures it offers, they are demanding the cards from their issuers. According to the infographic, 47 percent of the credit card frauds take place in the U.S., and this is primarily based on the magnetic stripe technology still being used here.

Since EMV was deployed in Great Britain in 2004, face-to-face fraud has dropped by 72 percent, while domestic card fraud in Canada decreased by 48 percent from 2011-2013. 

The organization is forecasting there will be 900 million EMV cards in the U.S. by 2016, and as mobile payments become part of the ecosystem, card issuers and retailers have to provide the most secure and efficient solution in the market place in order to compete with new payment systems.

The EMV Migration Forum was established to help ensure a successful introduction of more secure EMV chip technology in the United States. By addressing the challenges and opportunities the technology offers merchants and consumers, the forum has helped industry cooperation and/or coordination for the effective implementation of EMV based card technology across the country. This includes:

  • Providing guidance on technical issues, consumer awareness and other non-proprietary issues relating to industry-wide adoption of EMV chip technology.
  • Developing non-proprietary best practices and training materials necessary for successful adoption of EMVchip-enabled cards, devices, and terminals within the United States.
  • Discussing the coordination of process-related elements of the payments infrastructure necessary to introduce an EMVchip-enabled payment system.
  • Discussing and engaging in projects to facilitate consumer adoption and allow for a more consistent consumer experience.

“2015 is set to be a milestone year as the U.S. accelerates its move to chip payments. As such, now is the time to start ramping up efforts to educate retailers, issuers, consumers and the media on chip technology, its security benefits and the changes to the payment process,” said Randy Vanderhoof, director of the EMV Migration Forum. 




Edited by Maurice Nagle




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