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EMV in the USA: At Last (Perspective)
August 9, 2011
Mercator Advisory Group
EMV, the smart payment card standard used in most of the rest of the world, is finally getting an endorsement and a strong nudge for its deployment into the U.S. market.
Visa's long awaited announcement today of its "Plans to Accelerate Chip Migration and Adoption of Mobile Payments
" starts laying the ground work for two complementary moves. The first is the replacement of magstripe cards with far more secure chip cards. The second is the active encouragement of merchants to purchase terminals with both contact and contactless EMV interfaces. That means merchants can accept both cards and, more importantly, transactions originated by NFC-equipped smartphones.
The U.S. has long held onto the magstripe card, a tactic that's worked so well because of our online authentication and authorization systems in the core of the payments network. But even all of that computer power can't counter a range of fraud types (especially counterfeit cards and card not present fraud for online commerce) when it's so easy to copy the payment data off of a magstripe card. EMV essentially makes counterfeit cards a thing of the past. The potential exists, of course, for counterfeit EMV cards to exist but right now it's economically impractical - and that's enough to keep criminals from bothering when there are so many easier ways to profit.
Visa's announcement addresses a major security weakness in today's payments perimeter and moves the peanut way down the field for contactless smartphone payments. At last.
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