It’s been almost a year since the EMV liability shift went into effect in the U.S., causing major changes within the payments industry. Although there were glitches and setbacks throughout the past several months, the transition from magnetic-strip cards to chip cards has continued to grow, as more merchants begin to adopt EMV technology and more consumers receive an EMV chip card.
“In terms of branded credit and debit cards, the U.S. has been quite remarkable regarding the speed at which it’s been converting to EMV cards,” said Martin Ferenczi, president of Oberthur Technologies, a leading global EMV product and service provider.
Full EMV-adoption could take several years and is anticipated to reach 90% by 2017. Now that the first holiday season of experiencing EMV technology has passed, many merchants within the first half of 2016 have already begun upgrading their products and solutions to meet EMV requirements.
“We are seeing more engagement now from merchants [since] the first of the year,” said J. Craig Shearman, vice president for government affairs and public relations for the National Retail Federation. “They understand a little more about what the liability shift is and understand more about what the process is.”
According to recent data collected from MasterCard Inc., as of April 30th the amount of merchants that accept chip cards has grown to 1.4 million. This is a 17% increase compared to the 1.2 million MasterCard stated back in March. In April, Visa Inc., reported there were 1 million merchant locations that had EMV terminals, roughly 20% of all merchants. MasterCard also reported that 68% of their U.S branded MasterCard consumer credit cards contains an EMV chip, a growth from 67% from their last report.
“The number should continue to grow until we hopefully reach the 98% of chip card penetration projected by the Payment Security Task Force for the end of year 2017,” spoke Chiro Aikat, MasterCard senior vice president of product delivery for EMV.
Counterfeit card-present fraud has decreased slightly with the emergence of chip cards, while online fraud has increased due to EMV. Compared to January of 2015, there was a 39% decrease of card-present said fraud from a selected group of merchants in January of 2016. To help further progress a reduction of fraud, MasterCard revealed they would be working with acquirers, processors, and other payment networks to help accelerate EMV card checkout times by using their M/Chip Fast technology. However, this would involve collaboration with multiple players in the payments industry.
"Right now there are discussions within the EMV Migration Forum amongst the payment brands, processors and merchants to better understand each of the brands’ specifications for faster chip transactions and how they might impact merchants and cardholders," says an EMV Migration Forum spokesperson.
It’s safe to say EMV adoption has continued to grow throughout its first year, as more merchant’s upgrade to EMV-capable solutions and more consumers receive EMV chip cards. With EMV now in place, card-present fraud has also shown to decrease, making one important piece of an overall payment security solution.