Thursday, 21 April 2011

EMV, a view from America.....

A lot is heard about EMV from those countries that are embracing it, but what about the view from the US?  The European Payments Council have today published their latest news letter.  In it there is a very good article entitled  “The Magnetic Stripe: Why it is Hard for Americans to Say Good-Bye  - In the US, clinging to old-fashioned payment methods is more than just a bad habit”. 

Some key points from the article, which is written by Bob Sullivan, are below:
  • US banks generally perceive fraud losses to be less than the cost of upgrading the card infrastructure to comply with EMV standards. Until those lines cross, there are no incentives for the US financial system to engage in such a dramatic change.
  • It might however be worth the while to do the maths again. Some US card industry observers recently indicated that losses due to fraudulent card transactions in the US might already exceed the costs of EMV migration.
  • It should not be expected that the US government will enforce migration to EMV.
  • US consumers are satisfied with the fraud fighting measures other than chip and personal identification number (PIN) technology, which are currently in place. In their view, having to enter a PIN when making a card payment creates a ‘solution in search of a problem’.
  • More could be done however to enlist consumers as fraud-fighters and to convince them of the added value of chip and PIN technology. US travellers whose magnetic stripe cards are increasingly refused as a means of payment in Europe, could be the first to ask for change.
  • It will take a combination of consumer education, ease of use, cost-saving technological advancements, clearer fraud accountability and government enticements to break down the Americans’ loyalty to the magnetic stripe card
You can read the whole article on the EPC website

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