Some Credit Unions Say No to EMV Chips
Fully 17% of credit unions surveyed for a new report on the U.S. debit industry told researchers they do not plan to issue debit cards with an embedded EMV chip. This means these credit unions risk taking all the liability for card fraud from their non-EMV enabled cards after the industry goes through its planned October 2015 liability shift.
The PULSE ATM Network released its 2014 Debit Issuer Study on Tuesday. Research firm Oliver Wyman conducted the study for the report.
Five percent of the credit unions surveyed said they already issue debit cards with EMV chips embedded and 78% said they planned to issue the cards in 2015. The survey found that 14% of all debit card issuers said they would not issue debit cards with the embedded chip, with 22% of community banks saying they would not do so and 4% of large banks.
The issuing gap might relate to the percentage of issuers that believe MasterCard and Visa will end up moving the date for the liability shift, pushing it back from the October 2015 deadline. According to the research, 59% of community banks believed the card brands would shift the deadline, with 39% of credit unions expecting such a shift and 20 of the largest banks looking for one.
The study also put cost numbers to the Target breach, at least on a per transaction basis. Fraud in 2013, including the Target breach, took roughly 2 cents of the interchange of every big bank signature debit transaction and about a half-cent from the interchange drawn from each PIN authenticated transaction, according to the study.
It took 2.6 cents of the interchange from each community bank signature debit transaction and about 1/10 of a cent from each PIN debit transaction.
By comparison, it took 2.5 cents of the interchange from each credit union signature debit transaction and about one-tenth of a cent from the interchange from each PIN debit transaction.
Houston-based PULSE is an ATM network subsidiary of Discover Financial Services, which now claims 4,400 participating banks and credit unions across the country. This is the ninth year the network has sponsored this study.