Payments

Have US Issuers Done Everything They Could to Help Customers Transition to EMV?

US consumers with chip-and-signature cards may find some merchants outside the US (and particularly in Europe) that are unwilling or unable to process their cards, even though they have embedded chips.

My experience with EMV in Europe

I was about to go on a European business trip and forgot the PIN assigned to my credit card. I called my bank and they said it was possible to select a new PIN, but that I would need to go to an ATM that supported EMV cards.  I found an ATM about 15 minutes from my home; however, the transaction didn’t work. Unfortunately, the EMV reader was not working and I could not update my card with a new PIN.

This left me totally dependent on my card company’s reassurances that I would still be able to use my card in Europe, as the merchant would ask me to sign the transaction slip instead, but unfortunately, they were incorrect.  The first purchase I tried was a train ticket, but I couldn’t; they only accepted chip-and-PIN for debit and credit cards. It was only due to my persistence that my card company offered me an alternative way to select my PIN via a cash advance at a local ATM. Although my credit card company originally issued me a PIN (which I forgot, since I don’t use a PIN in the US), this experience has made me question whether the use of chip-and-signature in the US is really the best solution for customers, especially in this age of global travel and cross-border trade. Certainly, others have weighed in on this in the past.

EMV Liability Shift

Mastercard’s EMV ATM liability shift started on the 21 of October 2016 and Visa has stated October 2017 as its deadline.  It would be interesting to know how many US issuers have the ability to send a PIN change command to their ATMs and whether that ATM has the ability to write to the chip card. It’s expensive to upgrade all ATM card readers in the US to support EMV chips, but acquirers need to start scheduling these uplifts.

The business case for EMV

Issuers have plenty of other reasons to champion and push EMV adoption, such as the essential technology to combat large-scale data breaches and the increasing rates of counterfeit card fraud worldwide. Of course, we all want to protect our customers and reduce the cost of fraud; we can achieve this because EMV makes it harder for criminals to successfully profit from stolen card credentials. In fact, criminals have switched their attention from countries that have already transitioned to EMV cards and are now focused firmly on the US, where fraud has doubled in the last seven years as a result.

But there is light at the end of the tunnel for merchants. Visa announced that in March 2016, chip-enabled merchants saw a 35% drop in counterfeit fraud compared to a year earlier – and the year-over-year fraud rate for larger merchants could be as high as 60% based on research done by Mastercard on their top five EMV-equipped merchants.

The payments industry at large must continue its efforts in supporting consumers and corporate customers with EMV, whether in the US or traveling abroad.

*Sources: Payments Source, Payment Security Task Force, Visa, MasterCard, Smart Card Alliance, First Data, CreditCards.com research, Aite Group, PULSE.

Karin Brown

Karin has extensive experience in Retail Banking Payment Systems with a focus in product management and retail banking operations.  Over the last 20 years, Karin has worked at ACI Worldwide as a Product Manager responsible for many aspects of retail banking payment processing including ATM and POS, Branch, Internet and Mobile banking, transaction processing and payment authorization. She was the founding chairperson of the IFX Forum Branch Banking Services working group and participated in the Smart Card Alliance EMV Migration Forum.

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