Why Not Move to EMV?

Posted By: Art Harper | July 25, 2016 | 0 Comments

As the industry progresses through the first stage (POS terminals) of the EMV liability shift and moves closer to the second stage (ATMs), one question that can be asked is “Why would any issuer not want to get certified for EMV?” So, let’s review the benefits of migrating to EMV, the challenges that the industry has experienced in terms of usability or access, and how the industry has worked together to resolve the challenges presented by the movement to EMV.

Benefits of Migrating to EMV

As we have seen for the past several years, fraudsters have exploited the U.S. market’s lag in the adoption of EMV technology. The prevalence of mag stripe cards in the U.S. afforded criminals the opportunity to skim card data and create counterfeit cards. The movement to EMV enablesEMV Chip_jpg issuers to push the liability for any fraudulent activity on the card back to the merchant if the merchant’s POS terminals were not certified for EMV. Since the liability shift, PSCU has been able to assign over $3 million in fraudulent transactions to the non-compliant merchants. Merchants that are EMV-certified have reported about an 18% reduction in fraud. These attributes have instilled confidence in consumers that issuers and merchants are both working to address and resolve fraud occurrences.

Challenges of Migrating to EMV

Education about EMV represents one of the top migration challenges for credit union members and merchant staff. Some issuers did a great job educating their cardholders with inserts in the statements, important information on the card carrier and updates to their website. However, others did not provide enough clear information to cardholders, which resulted in more calls and visits to their financial institution. Additionally, cardholders have no visibility into which merchant locations are certified to accept EMV because no directory of EMV-certified merchants exists in the market. On the merchant side, the lines at checkout have been extended due to the changes in the payment procedure along with the increased processing time of an EMV transaction.

Industry Response to Meeting Challenges

Many issuers are following the best practices of institutions that created education programs around the EMV migration. They are learning that continuous education on the migration will reduce calls and visits to their call centers and branches. On the merchant side, the card brands are working to implement Quick Chip and M/Chip Fast. This process is expected to speed up checkout time as the EMV card will just be inserted and removed versus inserting and leaving the card in the device until the transaction completes.

So, given the benefits of migrating to EMV and the work being done to meet the challenges experienced by issuers and merchants, should any issuer still be hesitant to move to EMV? The answer should be no as the industry is moving to more secure transactions via EMV for card-present transactions and tokenization on the card-not-present side. Issuers that do not stay current with these newer payment technologies risk a reduction in transaction volume and the loss of cardholders who are becoming better educated on these payment options and increasingly concerned about protecting their data.

Art Harper

Art Harper

Art is responsible for the management and growth of EMV products and services and is a member of the EMV Migration Forum participating on the ATM and Debit Working Committees. He has conducted over 50 EMV educational sessions reaching over 1500 people. Art has been involved in providing his perspective on the EMV movement in the U.S. with articles in the CU Times and CU Tech Talk.
Art Harper

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