The discussion around EMV technology has been going on for several years. We posted our thoughts last year about the October 2015 deadline and the larger issue of server compromise. Any steps we take globally to curb identity and credit card theft are good steps. The upward trends and supporting data seems to indicate a need to push forward. Take a few minutes to read the statistics in this article and let us know where you think the focus should be placed in order to keep pace.
The U.S. is lagging behind
An article on EMV in Payments Leader gets right to the heart of the matter:
There are an estimated 1.24 billion payment cards and 15.4 million POS terminals currently in use, most of them in other countries. Making global financial transactions work across many cards and devices are smart chips embedded within new EMV-compliant credit and debit cards. These chips make interfacing with the various POS terminals possible. However, the EMVCo standard has yet to be adopted globally, a situation that the Payment Networks’ EMV migration roadmap for the US intends to correct. To date, Europe, Canada, Latin America, and the Asia/Pacific region are all well on their way with migrating from the legacy magstripe standard to EMV chip card technology. The U.S., the world’s single largest user of payment cards, has just begun the process. However, the potential impacts of being the last bastion of magstripe technology is forcing U.S. financial entities to take the idea seriously.
As with any global initiative, it takes time, plenty of cooperation and of course, money.
Card fraud is on the rise
In the U.S. alone card fraud related costs are estimated at $8.6 billion annually. Experts believe that figure will exceed $10 billion in 2015. And this increase can be directly linked back to the U.S. not making significant progress with chip card adoption. Dramatic increases in mobile payments can also be linked to this continued upward trend. Again, from Payments Leader:
In 2010, the total gross dollar volume of mobile payments in the U.S. alone was $16 billion; some experts expect this volume to rise to $214 billion by 2015. If ever there was a time to ensure compliance with a global chip-compatibility strategy that reduces fraud, it’s now. This is especially true in light of the fact that many countries are now considering banning traditional magnetic stripe cards, a technology standard in use for over 40 years.
Ready or not, here it comes
We wanted to emphasize the last line of the previous quote: “countries are now considering banning traditional magnetic stripe cards.” Ready or not, the technology we’ve used for 40 years is being eliminated. Card issuers are scrambling to get dual technology cards into the consumer wallets right now. You may have already received a replacement card with both magnetic stripe and microchip. Now it’s the merchants turn to get ready.
In our next article, we’ll take a closer look at how this new chip card technology is impacting what has been termed ‘liability shift’ for card issuers and merchants alike.