This week we were able to talk with Xavier Giandominici, VP & General Manager at FIME America. FIME works with issuer banks and payment networks such as Discover, American Express, MasterCard, and VISA on consulting and testing solutions for chip-based payments security systems.
Recently, FIME released a new whitepaper covering the implantation of chips in the U.S. Using this opportunity, we asked Xavier to share his thoughts on what we can expect from FIME in the near future.
Q: FIME has been a pioneer in supporting EMV for many years, and you have been involved in the US operations since the beginning. How has this EMV affected your business? Do you think the industry is able to cope with it?
XG: FIME has been involved in the arena concerning EMV and payments globally since 1995. Specifically related to EMV implementation, we’ve been covering many projects in different parts of the world. This is something that is actually the bulk of our business, so we’ve done that from Asia, to the US and close neighbors, like Canada and Latin America. There is a lot going on there these days (LatAm). The U.S. migration is definitely a great opportunity for us to show and apply the expertise and lessons we’ve learned in the last few years.
So that’s definitely a major impact for all of the industry, and also a major impact for FIME. We recently opened an office in California to address the increasing demand and needs for EMV expertise and education so we specifically target merchants looking for support in consulting and testing amid lots of talk about how to make this easier.
Q: We have seen various projections for EMV adoption by end of 2015 - from single digits to more than 50%. What is FIME's realistic view? How fast can we get to complete adoption in the US?
XG: We believe that at FIME’s level and also through the different interactions we have with the industry, banks and different associations, we definitely agree with the idea that the target should be around 50% of the market for migrating to EMV terminals. We have to be careful with this given the complexity and the numbers they’ve called for in the U.S. market and we can say that this number will be achieved mainly thanks to the major and biggest players, and the big merchants.
One of the major concerns for us is that we expect a long time before the rest of the smaller and mid-sized merchants are migrated, so that is also where we see a lot of interest for our services and a lot of need for education and solutions.
We recently launched a white paper to support that target of mid-sized merchants to explain to them how to implement and how to simplify the process. That market is in need of support and this causes the migration to take a bit longer. If you look at all the countries, we are moving pretty fast as far as the migrations; we are two or three years in. For the UK and Canada it will take ten years to be fully migrated, and a lot of work before we are 100% migrated.
Q: There has been some discussion in the industry about "chip and pin" vs. "chip and signature". Does FIME have a perspective in this regard? What advice do you give your clients on implementation of non-required features?
XG: This has been a long and technical debate. We do think the technology is here to provide any capabilities around this and we do consider this to be more under our consulting expertise. Each of the issues is pretty unique, so we tend to go case by case and explain our opinion on the issue based on the specific measurements. Risk and cost assessment goes into it; each of them will be unique: ‘What are the capabilities and the risks I am willing to take?’ EMV technology will allow them to go farther. We try to sit down and explain the possibilities of the technology and all the financial risks, basically trying to give them unique advice on the requirements.
Q: You have also been involved in the early days of NFC roll-out in the US. Any similarities or differences in the two implementations for merchants? Do you think one has slowed the adoption of the other?
XG: I do not think one has slowed the adoption of the other. It is important to remember that EMV is the base of any of those deployments. So for us, EMV is like the enabler of the rest, and if you see it like that, we can say that this U.S. chip migration is somehow providing the merchants with an opportunity to look at contactless and other things when they are looking at upgrading their infrastructure. They are doing this now and have been for the last year and they should be doing so most carefully now. This is when they will take a look and ask ‘What do I do with contactless?’ or ‘As I will upgrade my infrastructure (inquiring from the merchants side) what options do I have now to support not only contact EMV, but NFC?’ We cannot deny the impact of Apple Pay, and certainly Samsung Pay which is on its way. There is certainly a demand from new players on the POS side, all of those vendors are more and more interested in contactless and that’s typically a sign that we can expect this kind of dual migration. It is expected that we will see a need for contactless in the coming months for sure.
Q: LTP has a growing audience in the small business segment, who depends on us for news about innovations in this space. What advice would you give them, say for example to a bakery owner who just bought a new tablet-based POS terminal?
XG: It’s a tough one for small businesses, but I will say it is easier for smaller businesses than mid-sized businesses. The industry has been preparing itself for the last couple of years to cope with these projects, so for the small businesses, my advice is basically to have a look at all of the options out there. There are a lot of innovations on the POS side. They would need to have a look at these and see how they impact payments at their store, but do this directly with their service provider. The service providers are ready to support them and have the solutions. They should assess everything and see what they can do going forward. They need to make sure, in fact, that they are using what they have installed to its fullest capabilities. Maybe they already have a contactless reader that simply is not well provisioned, or they have a new tablet that includes a lot of capabilities that they do not know about.
For mid-size businesses, it is more complex; they have more complex systems and definitely require more help in developing their systems. With this chip migration it adds even more complexity and they certainly need more practical help. In fact we just released the white paper, some of it talks about how to help that segment of merchants with some key recommendations around implementation. Contactless migration is adding some layers of complexity into implementation, and FIME is working to somehow try and reduce and streamline the way the implementations can be done.
Q: We have heard a lot of anxiety around the complexity of EMV implementation. What practical steps can industry leaders such as FIME take to make the situation better?
XG: It is important for the industry especially in the US right now, so for FIME it will be key to continue supporting the EMV implementations and our clients for them to be prepared. We will do that and we will keep introducing more testing tools and trying to make the testing easier and automated so they can be sure that their solution will be ready on time.
Q: Can you share your key milestones for 2015? Any new areas that you are focusing on in your road map? Anything on the horizon that we should keep a lookout for?
XG: we need to keep an eye out because EMV is on the top of the equation so we are also working and preparing solutions to address new and complementary challenges. We consider all technology when working towards solutions. That’s because we see an increase in the ability of mobile payment solutions, e.g. we have Google Wallet coming back, we have of course Apple Pay, and certainly many others. In all of these, security will continue to be our primary concern going forward.