tranzaxisWith over 10 years of EMV migration experience under their belt, Compass Plus looks at the advantages of making the switch to the EMV standard and offers guidelines for successful implementation.

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The history of EMV

EMV was initiated by card issuers Europay, MasterCard and Visa to create a more secure payments framework. In 2004, after a successful trial in 2003, the UK was the first country that turned to EMV to combat rising fraud rates and since then many other countries have followed suit. In fact, according to EMVCo more than 80 countries across the globe are currently in various stages of EMV chip migration, including Canada. With 2.3 billion EMV cards issued worldwide, the need for interoperability with the global payments infrastructure is paramount: it is clear that EMV is here to stay.

The adoption of EMV in the US

Since August 2011, when Visa announced their plan to drive chip card and mobile payment adoption, the question of whether the US will adopt EMV chip technology was made redundant, with two questions remaining in its place: when and how?

By 31st December 2011, Visa announced that more than 1 million EMV chip-enabled cards had been issued by financial institutions across the US. MasterCard and Discover have since published their own recommendations of how to rollout EMV in the region. With the newly offered roadmaps and deadlines between 2013 to 2015 being acknowledged by the press, financial institutions need to start planning how to protect their current infrastructure investments whilst meeting these new requirements in a cost effective manner.

The advantages of EMV

    • Reduction in fraud

      It is undisputed that the main advantage of EMV is the associated reduction in fraud. Experience shows us that the introduction of EMV cards leads to a dramatic decrease in card related fraud. The UK Card Association reported that fraud on lost and stolen cards has been at its lowest level for the last two decades and that counterfeit card fraud losses are at their lowest level since 1999.

      EMV does not prevent fraud, however, as the expression goes: Security in IT is like locking your house or car, it doesn't stop the bad guys, but if you are lucky they will move on to an easier target.

    • International operability

      The U.S. payments ecosystem can only benefit from international operability. U.S. cardholders regularly report issues when using their magstripe cards for payments abroad. In fact, Aite Group has estimated that 9.7 million cardholders have encountered complications when travelling.

    • Ability to offer additional value-added services

The microprocessor based chip supports the use of many applications, one such example is integrated customer loyalty schemes.

    • A Foundation for contactless cards and NFC

      EMV will enable to the United States to move forward with innovative projects involving contactless payments on both cards and cell phones.

    • Shift in liability

      EMV compliant merchants will no longer be liable for the financial losses resulting from fraudulent transactions.