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Financial institutions all over the U.S. are reacting to the aggressive EMV migration deadlines set by the payments systems. Banks will need to make a number of decisions in the coming weeks about how they would like to upgrade their legacy systems and manage their EMV infrastructure moving forward; decisions that will impact their operations for years to come.
One such decision concerns data preparation for EMV. This is a more complex process than required for mag stripe cards as there is more key and cardholder data to protect. Financial institutions will need to make a choice between taking data preparation in-house and out-sourcing to a personalisation bureau. But what do banks need to know in order to make an informed decision?
Let’s take a look at a few factors that banks need to consider:
1. Containing risk – EMV’s increased security brings more data with it. Keeping the preparation of this data in-house contains risks as it is managed within a single environment. Once preparation is complete, banks simply send a personalisation file to their card personalisation provider, rather than a host of sensitive data.
2. Flexibility – With EMV data preparation, issuers have the option to configure the EMV risk parameters which define the circumstances under which a payment can be made. With the preparation processes in-house, the issuer can easily adapt the configuration of specific values for a particular set of cardholders which differ from the standard settings; a higher credit limit for ‘premium’ card holders, for example.
3. Procurement – By in-sourcing part of the process, banks can ensure that they are in a position to receive quotes for card personalisation from multiple suppliers, rather than be limited to ones that can offer data preparation as an additional service.
4. Additional services – Preparing data in-house gives banks control as to how and when they add additional services to run in parallel with legacy systems. For example, once EMV is up-and-running, banks will have the control and functionality to integrate the option of preparing payment credentials for mobile wallets.
5. Expertise – Taking data preparation in-house will require knowledge and skill to manage the process. There are many systems, however, which can be integrated with ease into legacy infrastructures and are adaptable to the long-term requirements of banks.
6. Costs – Banks need to evaluate the financial resources required to undertake data preparation in-house versus the long-term cost savings and flexibility that can be achieved. This will depend almost exclusively on its EMV strategy and future thoughts on implementing NFC.
Ultimately, this is an operational choice for banks. Those looking to take control of data, maintain the ability to choose suppliers and enable the option to build further capabilities into their offering should consider in-sourcing a data preparation solution.
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