With half of all fraud and 75% of all data breaches globally committed on 25% of payment cards, it comes as no surprise that the US card business cites fraud as the key driver in EMV migration. But the fact that only one million of the 14 million US acceptance locations are currently EMV enabled is a concern to the industry.
We spoke to Simon Hurry, senior business leader, Global Chip Implementations for Visa about the current status and the highs and lows of EMV adoption in the world’s largest and most complex payments market. Simon also talks about Visa’s efforts to simplify the EMV certification process and the launch of Visa Quick Chip technology to help speed up chip transactions in the US.
What kick-started the migration?
It started around five years ago with US cardholders going to Europe and merchants refusing to take their cards. In some cases, the teller had never used a mag strip reader and didn’t know how to swipe the card. We tried to educate merchants there around the liability shift but the message just didn’t’ get through. Then came the security breaches. Millions of cards were stolen, and people started to realise that despite their best efforts they were losing the mag stripe battle.
Why has the progress been so fragmented?
It comes down to two main things. Firstly, the complexity of the certification process that many networks introduced, which a number of merchants have got bogged down with. Secondly, the speed of the transaction. Most customers are used to swiping before shopping, as opposed to leaving the card in the reader to make sure the amount is available before the transaction takes place.
How is Visa tackling these sticking points?
Not only is our certification process a walk in the park compared with other networks, all the merchant needs to do is build and support EMV on their authorisation system. This means that there is no impact to dispute management, reporting key management or clearing and settlement – the reason why Apple Pay was able to get to market so quickly.
With our Visa Quick Chip product, we have also been able to speed up a transaction from seven down to two seconds. We’ve done this by building in a cryptogram with a pseudo amount so that the card can be checked and returned almost immediately. It’s got a lot of the industry excited as this has proved to be a major sticking point for cardholders.
How much longer do you think the migration is going to take?
Well, there are a lot more networks in the US than elsewhere, which could prove to be a potential stumbling block.
Companies who work with Visa can be up and running in weeks rather than months, and the industry is moving as fast as it can. But not everyone wants a Visa only solution so for chip cards to really take off, other companies need to streamline their processes, too.
Visa has now issued more chip cards in the US than anywhere else in the world with more than 240 million currently in use, and growing around 10% each month.
70 per cent of credit transactions in Walmart Home Depot and Target stores are now made with chip cards.
Merchant locations accepting chip cards are fast expanding with around 900,000 now on board.