EMV in the U.S.- can the banksmeet the deadlines?
As the payment systems drive EMV migration forward in theU.S., many commentators are observing that the currentdeadlines will be difficult to meet, especially for some of thebig U.S. banks.What are the challenges faced by banks, why should theycomply and what should they be doing to give themselves thebest chance of meeting the deadlines?EMV in the U.S. - can the banksmeet the deadlines?
The liability shift dates are approaching fast. At ahigh level, this will start in April 2013 when the majorpayment brands will begin providing PCI relief for allacquirer banks that support merchant acceptance ofchip transactions. Further down the line, in October2015, we will see a liability shift for fraudulenttransactions from payment systems to acquirer banksand merchants.1. What is the challenge?
The current target dates set by the payment systemsare aggressive considering the size of the U.S. market;the current state of issuer programmes to upgrade toEMV. One of the immediate considerations they face iswhether or not to implement an EMV solution in-houseor use a hosted service based on factors such as shortand long-term costs, time-to-market, risk, resources andIT infrastructure, for example.2. What does this mean for banks?
There are numerous benefits associated with theimplementation of EMV. Primarily, the technology ismore secure and offers increased protection againstfraudulent transactions.As a global standard, EMV also provides aninteroperable framework for worldwide paymentacceptance.3. Why comply?
Issuers will benefit from additional cost savings as thepayment systems will have reduced requirements forPayment Card Industry (PCI) audits, and will be evenmore so once liability shifts occur in 2015.As technologies such as near field communication(NFC) require an EMV infrastructure to be in place,migration to EMV also provides a framework for on-going development and deployment of value addedinnovative technologies.
The best advice for banks is to engage with the widerindustry and with EMVCo’s latest figures showingthat 5% of POS terminals in the U.S. already supportEMV, it is important not to get left behind. Speak withconsultants, integrators, service providers and vendorsthat have experience and can offer lessons learned fromimplementing EMV solutions in other regions such asCanada, Europe and Asia. There is no need to reinventthe wheel.4. What should U.S. banks be doing?
While the deadline is fast approaching and muchwork is still to be done, stakeholders that act now andget good advice will be well positioned to meet thedeadlines.Hoping that deadlines will be delayed or extendedis not recommended, and could lead to rushed andinadequate strategies being implemented that have notaddressed the long-term objectives of the organisation. So, can banks meet the deadline?
With over 20 years of expertise, Bell ID is considered the world’s leading provider oflifecycle management solutions for tokens (e.g. EMV smart cards, mobile NFC phones)deployed in single and multi-application programmes.www.bellid.comTodd FreymanVice President for the Americast.email@example.com