When the new credit card technology by Dynamics Inc. won best in show at Finovate 2012, a new movement was heralded. EMV Cards, the global standard for credit and debit payment cards are coming to the U.S.A.
Chip & PIN card technology is the preferred resource in Europe, Asia and Latin America. It is also touted as a more secure method of data storage than the currently used magnetic strip. In fact, when renewed credit cards are issued in 2013, the expectation is that the new Visa Cards will have chip & pin technology.
In contrast to the magnetic stripe, the transaction data is unique every time for the EMV. Magnetic stripes carry static information. Therefore, the payment data never changes. The risk involves thieves being able to steal the static data and create new fraudulent cards by “skimming”. In the United Kingdom, The UK Cards Association and Financial Fraud Action UK published a report. In its findings, fraudulent card loss has decreased by more than 63% since 2004. The decrease was credited to the growth in usage of the chip & PIN cards.
After expressing frustration over the inability to use the magnetic striped cards when travelling abroad, some U.S. card makers have moved ahead of the curve to service their clients. To date, a list of companies that have introduced EMV Cards are:
- North Carolina – based State Employee’s Credit Union EMV debit cards
- Citi’s Corporate Chip and Pin Credit Card
- Wells Fargo’s Visa Smart Card (credit card pilot program)
- The United Nations Federal Credit Union Chip and Pin Credit Cards
- U.S. Bank’s Flex Perks Travel Rewards Visa Credit Card
Now let us think…When it comes to speed, EMV is 53% faster than the stripe and 63% faster than cash. When it comes to security, its better too. So, what can we predict will be the next move by credit card company providers? The winds, according to many in the industry, are blowing towards incentives for contactless readers. Whenever there is fraud prevention, PCI Compliance is soon to follow. Therefore, the obvious expectation would have one predict financial incentives for merchants to incorporate contactless readers.
In all, EMV is a 18 year “over night” sensation. Europay initiated EMV in 1994. Europay International SA became part of MasterCard in 2002. In 2013, it is expected to immigrate and plant itself firmly as the United States preferred credit card solution. All I can say is “Kid,….you’ve come a long way in a very short time.”