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EMV Card Technology: Here to Stay

EMV card vs. mobile payment technology for financial institutions.

June 10, 2019

It’s clear that EMV cards benefit customers and financial institutions through protection from fraudulent purchases and data mining. It only makes sense to provide this in-demand tool while you comply with the latest regulations.

In the debate between EMV cards and Mobile Payments, U.S. users have a clear favorite.

Whether you call the credit cards using computer chips to authenticate and secure transactions “EMVs” (Europay, MasterCard, and Visa), “smart cards,” or “chip cards”, you are well aware that the reason for their existence is greater security. EMV has proven to be one of the strongest technologies for fraud prevention. The computer microchip securely stores data, making it nearly impossible for a criminal to create a counterfeit because each new transaction has a unique code that cannot be duplicated.

Reports by Visa indicate that some of the largest EMV-activated merchants experienced an 18% reduction in fraud, while those not EMV-activated saw a more than 11% increase. According to Mastercard, they saw a whopping 54% decrease in fraud costs after the first year of EMV adoption.

So, why would financial institutions question the wisdom of investing in EMV cards rather than NFC (Near Field Communications), mobile wallets, or other contactless payment methods?

It’s a fact that contactless payment is growing in popularity worldwide, but lags behind in the U.S. Overall, it’s use is popular in cities that use mass transit to speed passenger flow by eliminating time-consuming cash transactions or reloading passes at crowded kiosks. Another reason for global popularity is that in some regions, such as Latin America and the Caribbean, payment cards are rare, so contactless is the norm.

The main reason for lack of use in the U.S. is that, although most U.S. terminals are built to accept NFC, influential merchants, including Walmart and Kroger, choose not to enable the contactless feature. Perhaps this is a result of the overestimation of merchant interest during the first wave of contactless cards a decade ago. U.S. issuers pulled back on NFC and put their focus on EMV compatibility.

The 2020 liability shift. Will you be ready?

We could make this discussion short and sweet. Given that Visa and MasterCard have issued a deadline to all card acceptors to replace magnetic strip card readers with EMV technology by 2020 or be faced with increased liability, the obvious choice is to make the commitment to EMV now, avoid the rush, and use any advantage to get ahead of the competition.

Yes, there is a cost in upgrading with EMV card hardware installation for merchants and financial institutions, and there is still some customer confusion at the checkout, so it’s prudent to choose the right EMV readers and take time to educate consumers. But, rest assured, this is not an all-or-nothing turnover.  EMV is “backwards compatible,” meaning it will still accept magnetic swipe cards, even if it takes decades for EMV to fully replace them.

The old adage, “the customer is always right,” is still true in smart business. Consumers want options in how they elect to spend their money. A recent study showed 82% believed customers should have a choice in payment technology and 75% said retailers should accept as many forms of payment technology as possible. So, it makes sense to consider the right hardware partner.

In time, mobile payment may be even safer than plastic, and people tend to carry their phones, even when not carrying a wallet. Until now, only about 13% of consumers have used their devices to pay, citing that they find regular methods more convenient and trustworthy, and they can’t count on their phone app to be accepted everywhere. Today, only 20% of store locations in the U.S. are contactless-enabled. No doubt, the nation will catch up the global use, but not in the near future.

With EMV cards the clear winner, instant EMV issuance offers even more advantages for financial institutions and customers.

It’s clear that EMV cards benefit customers and financial institutions through protection from fraudulent purchases and data mining. They protect business customers, as well. It only makes sense to provide this in-demand tool instantly, while you comply with the latest regulations.

Rather than risking non-activation of cards sent through the mail, many financial institutions are advancing to instant EMV issuance. This allows the institution to print secure, chipped credit and debit cards within a branch. They are ready to activate and can instantly be set with a PIN. Not only is this method cost effective by the elimination of postage expenses and fees for lost mailings, it provides increased customer satisfaction. Customers are instantly gratified by an instant solution, ready to use their new, secure card. An added bonus? Your financial institution’s brand is reinforced with custom images on the cards. Not to mention the benefit of face-to-face customer service.

The four tools required to offer instant issuance include:

  • Software
  • Card printer
  • Blank or pre-designed cards
  • Professional support services

It’s impossible to determine the total ROI on this valuable customer service, but offering an instant solution to a customer’s frustration cannot be overstated. They do not want to wait to receive a card in the mail, and instant issuance is proven to increase activation rates and spend for customers. After all, a customer cannot use a card while they are waiting to receive it in the mail.

EMV is a fact of life. The 2020 compliance is a fact of life. And instant issuance is a fact of profitability and customer satisfaction. Why wait to make it happen?

You can learn more about making this technology work for you in this white paper from BLM, “From Chaos to Confidence: Mastering Instant EMV Issuance.


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Mastering EMV Card Issuance