US migration to EMV gathers momentum
13 August 2014 / http://www.finextra.com
More than 575 million US payments cards will feature EMV chip security by the end of next year, according to a trade body set up to push the migration from magstripe plastic.
Visa and MasterCard set out a roadmap for the introduction of chip cards back in 2011, with liability for fraud-related loses switching to retailers that have not upgraded their hardware in October 2015.
Despite this, many financial institutions were initially hesitant to commit to EMV because of uncertainty around retailer adoption of chip card point-of-sale terminals, questions about the viability of the business case for migration, and unresolved issues related to regulation and support for merchant routing choice.
Attitudes changed in the wake of the Target breach of late last year, which saw hackers infect POS devices and steal the details of around 40 million customer cards. Recent research from Pulse found that 86% of US financial institutions plan to begin issuing EMV-based chip cards within the next two years.
Now some of the biggest card issuers in the country have provided an update on their progress to the Payments Security Task Force (PST), a cross-industry group set up by Visa and MasterCard.
Between them, a group of nine PST members – Bank of America, Capital One, Chase, Citi, Discover, Independent Community Bankers of America, Navy Federal Credit Union, US Bank and Wells Fargo – forecast that half of their cards – 575 million – will be chip-enabled by the end of 2015.
Chris McWilton, president, North American markets, MasterCard, says: “The move toward enhanced security for cardholders and merchants is real and tangible. We’re gaining alignment around the most significant challenges where the industry needs to have a common foundation.”