The seemingly plodding U.S. migration to the EMV chip card standard may not be so plodding after all. Visa Inc., in data released Friday, says consumers made 1 billion Visa chip card transactions in March, a tripling of the 303.3 million in March 2016.
The number of transactions has steadily increased since December 2015, when there were 230.7 million EMV credit card transactions. Current numbers include credit and debit volume, but earlier data included only credit cards because there were so few EMV debit cards in issue.
Payment volume, however, dipped slightly. Chip card payment volume at $49.1 billion in March was 8.7% less than the December total of $53.8 billion. Consumers traditionally increase their spending at retailers in the fourth quarter compared with other quarters.
Visa’s data also points to a slowing growth in the number of chip cards in the U.S. market that bear its brand. Visa says there were 421.1 million credit and debit cards in the United States in March, compared with 408.1 million in December, a 3.2% increase. Of the total, 236.6 million are debit cards and 184.5 million are credit cards, Visa says. The March chip card total accounts for 58% of all U.S. Visa cards.
That compares to the 9.4% increase from September to December, and the 14.1% increase from June to September. Issuers were pushing more chip cards out earlier in 2016. The increase from March to June was 24.1%, very close to the 24.6% increase in total cards from December 2015 to March 2016.
“The Visa numbers show that the migration is progressing nicely, and pretty much as we expected,” says Thad Peterson, senior analyst at Boston-based Aite Group LLC. “As the number of EMV-capable terminals continues to increase, the rate of adoption will increase as well as merchants who have yet to complete the conversion start to quantify the value of eliminating chargeback expense and reducing fraud risk.”
Visa says that 2.02 million merchant locations—of which more than 75% are small and medium-size businesses—now accept chip cards, up 11.6% from December’s total of 1.81 million. Visa adds the March total is a 409% increase since the U.S. EMV migration began in earnest in October, 2015. These chip-ready merchants represent 49% of Visa’s in-store payment volume.
The number of small businesses that have adopted EMV is interesting, says Michael Moeser, director of the payments practice at Javelin Strategy & Research, a Pleasanton, Calif.-based firm. “Once the EMV shift began and fraud chargebacks began showing up on their monthly bank statements, they took notice almost immediately,” Moeser says in an email to Digital Transactions News.
“Now it’s not surprising that a small merchant with one or a handful of storefronts is able to migrate to EMV much faster than a national multi-lane store merchant with hundreds of stores,” he says. However, since the banks are continuing to push out both debit and credit EMV cards at a very steady pace, which is great news, the card present fraud that occurs is continuing to migrate to non-upgraded merchants. Small businesses are protecting themselves which is placing a greater burden on the big merchants who have not moved yet.”
Visa also says that its Quick Chip program, which is meant to expedite portions of an EMV transaction, is now used at more than 35,000 merchant locations. Announced a year ago, Quick Chip, and variations from other card brands, is a U.S.-only protocol.
Visa also pointed out that counterfeit fraud, which EMV is designed to thwart by making it difficult to use fake cards at the point of sale, decreased 58% in December 2016 compared with the same month a year earlier.