The US market was 25 years behind the times as it relates to chip-based cards, primarily because of the strength of predictive scoring and the cost of the emv conversion. The real network challenge was interoperability. U.S. cards were not working in Europe; and vice versa. But here we are, two years after the mandate and there are definitely industry benefits.
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Because of its security features, EMV-enabled cards significantly reduced fraud-related incidents.
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According to Visa, merchants accepting ‘chip cards’ reported a drop in counterfeit fraud losses by 58 percent in December 2016 when compared to December of the previous year.
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Similarly, Mastercard fraud data also saw a 54 percent decline in counterfeit fraud from April 2015 to April 2016.
For input/output forms, the network conversion mandates were particular effective on the issuing side.
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During the recent Secure Technology Alliance Payments Summit, keynote speaker Stephanie Ericksen of Visa revealed that 96 percent of the company’s payment volume at point-of-sale (POS) use EMV cards.
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In addition, 59 percent of POS terminals in the US accept chip cards—an impressive growth since the liability shift.
The muscle memory of doing a “swipe” is pretty much gone these days as the “insert mode” has taken over.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
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