October 1st is just days away and will mark a new era of payment transactions as EMV technology goes into effect. Although new in the United States, EMV has already been present in other countries for decades. In fact, over 80 countries worldwide already use chip cards, including Canada and several countries in Asia, Latin America, and Europe. However, merchants and consumers in the U.S. may still be curious as to why we need EMV technology here. 


With EMV technology, the cardholder’s information is stored in a chip that is embedded in the card. Rather than swiping a card at the point of sale, customers will now insert their card into the terminal and a unique, one-time-use code will be generated for that transaction. By using a strong authentication code combined with distinct transaction features, it is nearly impossible for criminals to duplicate an EMV chip card for fraudulent purposes. EMV will be a stepping-stone in expanding payment security within the U.S. 


"These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards," spoke Julie Conroy, research director at Aite Group. "It's an important step forward." 


Likewise, the U.S. needs to get on the same level as other countries that have already been using EMV technology for years. Adapting to the payment practices established in other countries will allow the U.S. to experience a more smooth migration.


Here are some statistics of percentage of card-present transactions that were EMV around the world from 2014: 


  • Western Europe: 96.6% of card present transactions were EMV
  • Canada, Latin America & The Caribbean: 85.41% of card present transactions were EMV
  • Africa and the Middle-East: 80% of card present transactions were EMV
  • Asia: 27.1% of card present transactions were EMV
  • The United States: .12% of card present transactions were EMV 


Although the U.S. is one of the later countries to transition to EMV technology, Carolyn Balfany, a MasterCard product expert notes "In the U.S., we expect that by the end of 2015, about 65 percent of consumers' debit and credit cards will already have chips on them, and about half of the merchant terminals in the country will be upgraded. We think that at that kind of rate, we will immediately start to see the benefits of the counterfeit protection." 


The improved security that EMV terminals bring with chip-card payments and additionally, the ability to process mobile contactless transactions, is a great selling point for businesses updating their payment equipment. Businesses who decide to upgrade to EMV must educate their customers and staff on EMV, ensuring them that the new and alternative forms of payments are more secure than past payment options. 


When businesses update their terminals, they'll likely see an increase in the amount of these types of payments they process. However, it's on merchants to upgrade their payment equipment and begin securely processing EMV transactions. 


The U.S. is long over due with transitioning to EMV technology, as they are one of the last countries to switch over to chip cards. EMV will be a very impactful on the future of payments in the U.S. and will help enhance the security of in-store transactions, decrease fraud, and encourage merchants to upgrade their terminals for more advanced solutions.