EMV in the U.S. - can the banks meet the deadlines?

As the payment systems drive EMV migration forward in the U.S., many commentators are observing that the current deadlines will be difficult to meet, especially for some of the big U.S. banks.

What are the challenges faced by banks, why should they comply and what should they be doing to give themselves the best chance of meeting the deadlines?

EMV in the U.S. - can the banks meet the deadlines?

The liability shift dates are approaching fast. At a high level, this will start in April 2013 when the major payment brands will begin providing PCI relief for all acquirer banks that support merchant acceptance of chip transactions. Further down the line, in October 2015, we will see a liability shift for fraudulent transactions from payment systems to acquirer banks and merchants.

1. What is the challenge?

The current target dates set by the payment systems are aggressive considering the size of the U.S. market; the current state of issuer programmes to upgrade to EMV. One of the immediate considerations they face is whether or not to implement an EMV solution in-house or use a hosted service based on factors such as short and long-term costs, time-to-market, risk, resources and IT infrastructure, for example.

2. What does this mean for banks?

There are numerous benefits associated with the implementation of EMV. Primarily, the technology is more secure and offers increased protection against fraudulent transactions.

As a global standard, EMV also provides an interoperable framework for worldwide payment acceptance.

3. Why comply?

Issuers will benefit from additional cost savings as the payment systems will have reduced requirements for Payment Card Industry (PCI) audits, and will be even more so once liability shifts occur in 2015.

As technologies such as near field communication (NFC) require an EMV infrastructure to be in place, migration to EMV also provides a framework for on-going development and deployment of value added innovative technologies.

The best advice for banks is to engage with the wider industry and with EMVCo’s latest figures showing that 5% of POS terminals in the U.S. already support EMV, it is important not to get left behind. Speak with consultants, integrators, service providers and vendors that have experience and can offer lessons learned from implementing EMV solutions in other regions such as Canada, Europe and Asia. There is no need to reinvent the wheel.

4. What should U.S. banks be doing?

While the deadline is fast approaching and much work is still to be done, stakeholders that act now and get good advice will be well positioned to meet the deadlines.

Hoping that deadlines will be delayed or extended is not recommended, and could lead to rushed and inadequate strategies being implemented that have not addressed the long-term objectives of the organisation.

So, can banks meet the deadline?

With over 20 years of expertise, Bell ID is considered the world’s leading provider of lifecycle management solutions for tokens (e.g. EMV smart cards, mobile NFC phones) deployed in single and multi-application programmes.

www.bellid.com

Todd FreymanVice President for the Americas

t.freyman@bellid.com