EMV Transition Marks Progress in Cards And Transactions, Evokes New Products

With the Oct. 1 liability-shift milestone passed, payments companies are reviewing progress so far and introducing new products to take advantage of the migration to EMV chip card payments.

First up is MasterCard Inc., which says that “tens of millions” of chip-enabled transactions are being made in the United States. “I would say it marks great progress already,” says Carolyn Balfany, senior vice president of product delivery and EMV at MasterCard, who declined to provide a specific number of transactions.

She cites a Sept. 30 news release from MasterCard saying that 40% of MasterCard consumer credit cards now have an EMV chip.

Meanwhile, the Payments Security Task Force, an industry group comprised of payment networks, leading card issuers, processors, merchant acquirers and some national merchants, said on the same day that it expects the number of chip cards to grow to 60% of the U.S. base by year’s end and 98% by the end of 2017.

MasterCard also said 350,000 U.S. merchant locations accepted EMV cards in September. That’s up from 301,000 locations in August, according to Visa Inc., but still only about 4.5% of an estimated 8 million card-accepting locations.

Some analysts expect a rapid ramp-up from national merchants in October, then a lull until after the holidays because merchants don’t want to tinker with their point-of-sale systems in November and December. The Payment Security Task Force release said the group’s member acquirers estimate 40% of their terminals will be capable of accepting EMV transactions by year’s end.

“Secure payments are already happening in the U.S., which is tremendous, and we’re seeing a quick acceleration,” says Balfany.

Her reaction to criticism from merchant groups that EMV is a “half-baked” and costly solution for merchants to card fraud:

“From the beginning it’s been understood that no technological upgrade happens without cost … I don’t think this is a new discussion, that there are costs associated, but importantly there are benefits derived by all.”

The benefits include the reduction of fraud itself and its associated costs such as dispute resolution and customer service. Then there is the more intangible benefit of increasing consumers’ trust in card payments after the rash of high-profile data breaches: “The events of the past couple years have shaken consumer confidence.”

Merchant acquirer Elavon, a unit of U.S. Bancorp, is attempting to counter the effects of these breaches with a new security service for small and mid-size businesses. Dubbed Safe-T, the product suite includes EMV chip card acceptance, transaction data encryption and tokenization, and data-breach protection.

These services had been offered to larger Elavon merchants for some time, Lori Haakmeester, North America product and innovation leader at the acquirer, tells Digital Transactions News. “As we saw the rollout of EMV ramping up, one thing that became very clear with small businesses was that they didn’t understand it very well,” Haakmeester says.

Small business owners generally lack the technology expertise and expansive budgets to dedicate to technology upgrades, which could put them at risk. “They do have some risk,” she says. “They could have a breach that could put them out of business.”

The supposition is that as criminals are thwarted by larger retailers’ countermeasures, they’ll turn to the next-easiest target, small businesses, Haakmeester says. “The people who perpetrate fraud will begin to find the other loopholes,” she says. “This gives [small businesses] an opportunity to be on par with some of the larger [Elavon] customers.”

Safe-T, which is available to Elavon’s resellers, such as independent sales organizations, is available now.

CardFlight Inc., too, says its gateway has been certified compliant by First Data Corp., enabling its mobile POS device to accept EMV payments. CardFlight expects to activate full EMV support for its merchants that process with First Data in coming days, says Derek Webster, founder and chief executive. Merchants need to use the latest version of CardFlight’s SwipeSimple iOS and Android apps to enable this functionality.

Mobile POS-provider AnywhereCommerce also launched an updated version of its Walker C2X card reader that now accepts EMV and Apple Pay transactions, in addition to magnetic-stripe payments.