I have been going on for some time about the need for the USA to take some concrete steps towards the implementation of the EMV standard - as it falls further and further behind the rest of the world. So it was with interest that I read an article published by the Mail Online a couple of days ago. It seems that two of the largest U.S. banks, JP Morgan Chase and Wells Fargo will start to trial EMV cards. The trial will be available to larger business customers and frequent travellers.
One driver for such change is of course fraud, in particular card skimming, and the US market is likely to become a honeypot for skimming fraudsters as they move there to practise techniques honed in other parts of the world during the shift towards the EMV. As recently reported by the European ATM Security Team (EAST), losses due to card skimming at ATMs in Europe have fallen for the sixth sucessive six month reporting period, and an increasing proportion of such losses are now international, i.e. occuring outside the card issuer's country. It would be interesting to see similar statistics for the USA.
The other driver for change to EMV is of course that the holders of stripe only cards are increasingly unable to use their cards for transactions at Chip only terminals. The article in the Mail Online quotes a study that has quantified the impact of such lost transactions - according to financial advisory firm Aite Group a 2009 study found that issues with U.S. cards not being accepted abroad cost $4 billion in missed transactions in 2008. Since then there has been significant further roll out of EMV globally and so I'm guessing that the equivalent figure for 2010 will have been a lot larger. And then of course there is the matter of reputational risk as disgruntled card holders realise that their bank is issuing them with cards that are not fit for purpose in all markets.
Two of the largest U.S. banks have announced that are to start EMV card pilots, I wonder how long it will take others to follow?
Need more information? Read the full article on the Mail Online