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.
Because of its security features, EMV-enabled cards significantly reduced fraud-related incidents.
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.
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.
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.
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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