Visa Inc. and MasterCard recently announced plans to accelerate chip migration and adoption of mobile payments in the United States by 2015. This includes the initial approach of migrating the payment infrastructure over to accept EMV® and NFC technology (contact and contactless). Additionally, most other payment infrastructures around the globe already have, or are in the process of, implementing chip-based methods with EMV technology as the processing standard.
So, what does that mean for U.S. issuers and their cardholders?
There is a new sense of urgency for all players in the market to understand what EMV technology means to them. Financial institutions and card issuers need to begin thinking about how this is going to affect them and what the next steps are to ensure that they are well positioned in the market as this migration happens.
At this stage it is essential to begin investing in the right education, training and infrastructure so that we can all be better positioned and prepared. This will help avoid costly errors when selecting how EMV technology will fit into overall business strategies.
Best Practices for Implementing EMV Cards into Portfolios
Get educated. Financial institutions need to learn and understand the complete EMV standard, process and architecture before they can get started. This includes understanding the implementation options and infrastructure requirements needed to rollout such programs.
Know your options. There are various EMV-compliant card programs that can help you get started. This can include pilot programs that do not fully commit to the infrastructure investment of an in-house bureau; central issuance or instant issuance of EMV-compliant cards; or PIN change and PIN selection. And, it can mean determining what is right for you and your cardholders, such as offering contact, contactless or dual-interface cards.
Costs associated. This includes everything from infrastructure changes to cost per card.
Understand how NFC personalization technology converges with EMV technology. The adoption of a dual-interface chip technology will help prepare the U.S. payment infrastructure for the arrival of NFC-based mobile payments by building the necessary infrastructure to accept and process chip transactions. Understanding the migration to NFC is important to consider when we think about how NFC technology will evolve in the financial and payment landscape.
Educating consumers. Consumers will need to be educated on what EMV-compliant cards are, how they can use them and what the benefits to them include. U.S. consumers are used to using their magnetic stripe cards at payment terminals. With EMV-compliant cards, they will need to be educated on how to insert their card and enter a PIN at each transaction, or ‘tap’ their card at contactless POS terminals.
*EMV® is a registered trademark of EMVCo.