Friday, 12 August 2011

The U.S. moves towards EMV! Visa announces plans....

Visa has just announced its plans to accelerate chip migration and adoption of mobile payments. This is great news as there is now a roadmap for (partial) EMV implementation in the U.S.  Visa will bring in a U.S. liability shift for domestic and cross-border counterfeit card-present POS transactions, with effect from 1st October 2015.  Merchants selling fuel will have an additional two years, until 1st October 2017.  Unfortunately there is no mention of ATMs - the preferred channel for fraudsters to obtain cash!

I have commented in the past about the fact that the U.S. is lagging behind the rest of the world due its reluctance to adopt EMV or Chip and PIN technology.  The gap that is opening up as a result can be separated into two main parts: 

Firstly card fraudsters are now increasingly using compromised EMV cards to obtain cash in the U.S. - this is possible as an active magnetic stripe can be copied or skimmed from an EMV card, and a counterfeit created.  While overall European card skimming related losses are dropping, an increasing proportion of these are now occurring in the U.S. as is stated in the 2010 European ATM Crime Report produced by EAST.  Also, of course, domestic fraud losses for U.S. card issuers will almost certainly be rapidly rising. 

Secondly, the holders of U.S. stripe only cards are increasingly unable to use their cards for transactions at Chip only terminals in other parts of the world, leading no doubt to substantial drops in related transaction volumes and revenue, as people use Chip enabled travel cards or other alternatives.

The Visa announcement is a positive step in the right direction, although 2015 is still a long way off and U.S. ATM transactions still need to be added to the domestic and cross-border liability shift.  I wonder when we will see a similar  announcement from other card schemes?

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