The message in Monday’s EMV themed webinar hosted by The Members Group was stark: If you haven’t yet started your EMV implementation program, meeting the October 2015 Visa and MasterCard deadline for a shift in liability will be challenging, said Thomas Grouard Lillelund, CPI senior manager, who gave the presentation.
A large plastic card issuer CPI is on the frontlines in the race to be on the right side of the 2015 liability shift when the big card issuers say that they will hold merchants and issuers responsible for fraud if they do not support EMV by the deadline.
Lillelund quoted an unidentified card issuer who, said Lillelund, estimated that if he held back on EMV card rollout but his competitors pushed ahead and had achieved 40% distribution by October 2015, “he estimated his fraud would double,” said Lillelund.
Two factors continue to fuel the push into EMV, said Lillelund. First there is the belief that EMV cards with chip and PIN represents a sizable security jump over mag stripe cards.
Secondly, much of the world – led by Europe and Canada – already has adopted EMV and that is pushing fraudsters to focus on U.S. networks but it also is rendering U.S.-issued mag stripe cards useless at a growing number of international terminals.
A reality, per Lillelund: all U.S. cards will not suddenly be EMV-compliant by October 2015. He estimated 30% to 60% percent will be.
He elaborated that the 30 biggest issuers all have EMV strategies and are marching ahead. Smaller issuers are more uncertain in their adoption and rollout strategies, said Lillelund.
Issuers need to have a target in mind – what percentage of their cards do you want to be EMV compliant by deadline – and know that non-compliant cards may be linked to increased fraud, he stressed.
He also said that unlike credit cards – where there is a sense EMV cards will become the norm – there is more uncertainty around debit cards and EMV.
The most common issuer posture is to be in a wait-and-see mode, said Lillelund.
A question from the audience asked, is EMV simply old technology? Lillelund said, “Are four wheels on a car old technology?”
He elaborated that although the EMV core idea dates back decades, “the technology has continued to evolve. Today’s chip is very different from the chips of 20 years ago.”
He added that he believed a multi-channel strategy is likely to flourish in the U.S. Mobile commerce may take hold but, he said, “I don’t think cards are disappearing anytime tomorrow.”