EMV: Looking Back at a Year of Chip Card Progress in the U.S.
October 3 2016 |
It has been a year since the ‘Fraud Liability Shift’ of October 1, 2015, a date which signified an important change in the payments arena. The fraud liability shift stipulated that merchants who did not have the hardware to process EMV chip cards would assume liability in the event of fraudulent transactions. There was some initial resistance from merchants based on the cost of upgrading equipment but the long term benefits of fraud reduction, have with time, eliminated any prior hesitation.
The last year has seen headlines dominated with stories of compromised credit cards and data breaches. As a result, there is growing concern about fraud from merchants and consumers alike. The good news is that EMV technology is making it much harder for criminals to successfully profit from what they steal. Every time an EMV card is used for payment, the chip creates a unique transaction code that cannot be used again or replicated. As more and more EMV-based transactions continue to happen, it is becoming increasingly difficult for criminals to steal card data and use it fraudulently. A June 2016 update from Visa, on cardholder and merchant EMV migration, showed that chip-enabled merchants experienced a 35% drop in counterfeit fraud year-over-year.
There has been remarkable progress in the U.S. migration to EMV and this may well be attributed to the commitment and cooperation from the entire payments industry. According to the same update from Visa mentioned above, there are more than 326 million Visa chip cards in the U.S. and more than 1.3 million chip-enabled merchant locations. Mastercard also announced in August 2016, that 80% of its U.S. consumer credit cards had chips, representing an 88% increase in chip card adoption since the October 1, 2015 liability shift.
The EMV liability shift has also played a key role in the adoption of mobile payments by ensuring the infrastructure is in place to accept these payment types. EMV and NFC are complementary technologies and an NFC-compliant mobile device can communicate with a point-of-sale (POS) system that currently accepts contactless payment cards. As a result, Apple Pay, Android Pay and other mobile wallets have benefited from a frictionless introduction to the market!
So there you have it, 3 reasons why it has been a year of progress as far as EMV is concerned:
· Reduction of fraud at the point of sale
· Providing customers with faster, easier and more secure ways to pay
· Adoption of new mobile payment technology
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