The adoption of the EMV standard in the US is making good progress with nearly one million retail locations now ready to accept chip-enabled payments, a figure growing at four to five percent a month. The question is whether this is sustainable in the world’s most complex payment marketplace, which accounts for more than 70 percent of all cards issued.
New research which is the result of interviews with all corners of the payment square, combined with the outcomes of a nationwide industry survey, sets out the current situation regarding EMV migration from the point of view of issuing financial institutions, acquirers, merchants and consumers as well as related technology issues.
Restoring trust at check-out
The research reveals that EMV offers much more than a powerful weapon in the war against fraud at the check-out. Chip card transactions have the potential to restore consumer trust in payment in-store while giving the incumbent payment industry a valuable opportunity to re-state its commitment to delivering a secure, innovative payment market that is immune to external economic factors. At the same time as installing the final piece of the ecosystem to build an integrated omni-channel retail market, unrestricted by national borders.
However, realizing an EMV dividend of higher transaction volumes against lower losses from fraud will depend on coherent, consistent collaboration between all corners of the payment industry square. It is this ‘last mile’ that will test the transformative capacity of the industry as we know it before the digital payment era fully takes shape.
Education, cohesion, collaboration
Senior executives from Visa, the EMV Forum, National Merchant Association, Gemalto, Worldpay, Ingenico, BBVA, TD Bank, Moneris, Verifone and ACI alongside respondents from an industry survey, argue that improved merchant and consumer education and more coherent, bundled solutions for certification are necessary conditions for success in the US’ migration to the EMV standard.
EMV offers all actors in the payments business a golden opportunity to ‘square the circle’, creating a single platform for everything from traditional in-person transactions to mobile commerce, card not present and e-commerce businesses, strengthening the world’s largest single payments infrastructure and, by implication, the entire global network in the process. Failure to cover the critical ‘last mile’ may leave large parts of the payments infrastructure at increased risk of fraud, and at risk of disintermediation by new digital payment entrants.