America: Visa’s Unlikely EMV Leader

Americans like to say their country is No. 1. Now, according to Visa Inc., America is No. 1 in a most unlikely category: EMV chip cards.

According to figures Visa released Tuesday, some 141.9 million EMV credit and debit Visa cards were in issue in the U.S. as of August, not quite two months before the so-called EMV liability shift officially takes effect Oct. 1. That’s enough to make the U.S. the largest market for Visa-branded chip cards—ahead of older EMV countries such as No. 2 Brazil (129.4 million cards) and No. 3 the United Kingdom 124.2 million)—even though it’s the last major industrial country to embrace EMV.

“Four years after we embarked on a plan to introduce more secure chip technology, more people are using a Visa chip card in the United States than in any other country in the world,” Ellen Richey, Visa’s vice chairman of risk and public policy, said in a blog post. “What is even more remarkable is how quickly the U.S. reached this milestone. Only a year ago, we had fewer than 20 million Visa chip cards. But we’ve seen steady adoption, month after month, since that time.”

Before silicon-induced patriotic euphoria takes over, however, it should be noted that the current number of EMV cards represents only 20% of the 720 million Visa credit and debit cards in the U.S. Still, the latest card numbers represent a 12% increase in just one month, and a five-fold increase from the 28.6 million Visa chip cards circulating in January.

Visa reported other EMV numbers for August, too. The count of activated EMV card-accepting merchant locations increased 2% in a month to 301,000. EMV charge volume grew 61% to $3.64 billion in August from July’s $2.27 billion on 59.7 million transactions, up 64% from 36.5 million a month earlier.

While many big-box retailers and other large merchants have been deploying EMV point-of-sale terminals rapidly, merchant-acquiring executives don’t expect many terminals to be activated until Oct. 1 or thereabouts, or even not until early 2016, after retailers are over the holiday sales surge. Hooking up EMV card readers is simpler for small merchants, which may explain why 50% of Visa’s current chip card volume is coming from small businesses even though most have yet to install chip card readers.

Reflecting the comments of many other payments executives about the upcoming EMV liability shift, Richey says the changeover from magnetic-stripe cards to more secure chip cards will be gradual. “We expect to see many more merchants and card issuers migrate to chip technology in the months ahead, but we don’t expect everyone to make the change right away,” she says in her post.

The major payment card networks have set Oct. 1 as the date on which liability for counterfeit fraud transactions will be assigned to the party, either issuer or merchant, that doesn’t support EMV.