ContactlessNews | U.S. getting squeezed by EMV
U.S. getting squeezed by EMV
Wednesday, May 6, 2009 in News
With Canada and Mexico both going to EMV and most of the rest of the world doing the same it may be a matter of time before U.S. card issuers are forced to go to chip and PIN. EMV in the U.S. was the topic of a panel at the CTST Conference in New Orleans.
Geography isn’t the only issue either, says Rene Bastien, product manger for payment products at SAFENET. It’s becoming more common for U.S. travelers in Europe to have transaction denied because retailers aren’t authorizing transactions with just the mag stripe. “EMV is happening everywhere.”
Jack Jania, vice president and general manager of secure transactions at Gemalto, says some U.S. banks are considering issuing EMV cards to high-end customers who frequently travel overseas.
Dual-interface cards are also starting to appear on the scene, Jania says. These cards have one chip but can perform EMV transaction through a contact interface as well as contactless.
Canada may also bring to bear some pressure for EMV, says Deb Baxley, managing partner at Keypoint Solutions. If Canadian issuers start to see credit card fraud add up with mag stripe transactions merchants could start denying the transactions.
So when will the U.S. make the move? It’s hard to say. “I hate to put a date on it,” Jania says.
But there has been progress. Two years ago U.S. issuers wouldn’t even talk about EMV but they are now, Jania says. [end]
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If Canada goes emv, they will lose a lot of money. Most of their tourists are Americans.
"Geography isn’t the only issue either, says Rene Bastien, product manger for payment products at SAFENET. It’s becoming more common for U.S. travelers in Europe to have transaction denied because retailers aren’t authorizing transactions with just the mag stripe. “EMV is happening everywhere.”
Retailers are not authorizing transactions with just the mag stripe? First of all, retailers are truly not responsible for authorizing card payments. The issuing banks (banks that issue cards) are the ones that do the authorization.
Secondly, if some retailers are not accepting cards that just carry the mag-stripe, then this is in violation of card acceptance rules.
Rene Bastien of SAFENET should perhaps clarify his statement.
Written by a:
Person with 20 years of experience in card payments
Fraud on US Issued cards is less than half the rate of fraud on UK issued cards (predominantly EMV cards). Then what business case is there for the US issuers (who are mostly now under attack for the credit card interest rates) to implement EMV which will also most likely bring down related issuing revenues related to interchange fees?
Why is the fraud rate on mag-stripe US issued cards lower than the fraud rate on Chip and Pin enabled cards? Most cards in the U.S. are issued without pin-codes. Therefore, there is not much of a 'business case' for a fraudster to skim U.S. issued cards that are without pin-codes.
If a bank wants to implement EMV/Chip, then it should implement it as CHIP and signature. Some smarter issuing banks in Europe actually opted for this.