U.S. banks and credit card providers are getting ready for a major transition this fall — issuing customers new smart cards that have an embedded computer chip and making sure all merchants have the right equipment to scan the new cards. The so-called “EMV migration” actually goes back two decades to 1994 when Europay, Mastercard and Visa (ie. EMV) all sat down to hash out a plan for the future of credit/debit cards. At that point they agreed on a timetable to implement new anti-fraud chip-based cards, and the clock is finally ticking down toward October 2015.
A March 18th report from CardHub focuses on the impending EMV migration and what the full implementation of the EMV standards means to card providers, merchants and consumers. The report is based on a survey of the 10 biggest U.S. credit card providers and more than 50 large retailers.
Most banks and merchants are ready for EMV migration
Results from the CardHub survey show that all 10 of the largest credit card issuers are well underway in issuing chip-based credit and debit cards and expect the large majority of their portfolios to be EMV standrd-compliant by the end of 2015.
Moreover, all of the major retailers that replied to the survey say they will meet the October 2015 EMV transition deadlines.
Furthermore, all of the major banks are in the process of issuing chip-and-signature cards, with 40% also supporting PIN capabilities. Close to two-thirds of retailers plan to also accept chip-and-PIN cards. Moreover, all the chip-based cards issued by major banks will continue to have magnetic stripes, meaning the transition this October will really just a create an improved hybrid EMV system, not the highly secure 100% chip-based card system found in some European countries.
Diverging transparency policies
The report notes that “retailer transparency regarding EMV is surprisingly low given the level of consumer concern about data breaches and financial security.” It highlights that just 17 of the 55 retailers provided information about their new policies.
Credit card providers, on the other hand, were exceptionally transparent, with all of them offering detailed information regarding their EMV transition plans.