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There is a Possible EMV Delay Due to Uncertainties

It is possible that there could be a delay in transferring debit cards from PIN to EMV due to discussion and uncertainty in the United States government. The problem is that as of yet, no standard model has been developed for processing EMV payments. This has aggravated both business owners and consumers, especially after the Target data breach. EMV cards are less prone to being hacked, than PIN cards, and could be a saving grace for the US plastic card companies.

Walmart has pushed EMV cards for years. Visa and MasterCard had set EMV migration deadlines for October 2012, which has now passed. The original plan was that by April 2013, acquirer-processors and sub-processors must support chip transactions. The liability for fraudulent transactions depends on the card brand, and now but Oct. 1 of 2015 and 2017 are key dates for Visa, and Oct. 1 of 2015, 2016, and 2017 are key dates for MasterCard. American Express has announced Oct. 1, 2015, for its liability shift date. Parties not adopting EMV by the relevant deadline could bear the financial consequences of fraudulent transactions.

Card brands also differ in methods for EMV card acceptance. While MasterCard and Discover want Chip and PIN for added security, Visa has said says that the security of online processing removes the need for the offline authentication of Chip and PIN. To complicate matters even further, many in the industry believe that merchants should upgrade payment terminals to accept mobile payments and EMV acceptance capabilities at the same time.

Nevertheless, implementation of contactless and EMV standards remains stymied because in the U.S they really are not “standards” at all. Disputes and non-cooperation persist in the NFC payments market, as telecoms and handset manufacturers argue for their preferred approach. What’s more, issuers, merchants, card firms, and regulators in the U.S. still are not agreed on liability, the burden of terminal conversion, or the politics of implementation.

While EMV in the U.K. was enabled by a collaborative effort including the government, bank users, and associations, U.S. interests have failed to fall into alignment. Until that happens, no one wants to pay for the terminal conversion, which Javelin Research estimates could cost as much as $12 billion. Of course, this assumes that the industry could actually reach an agreement on who should pay, or how.

While the implantation of EMV is exciting for those in the card and processing industry, it is facing an uncertain future. While congressional arguments can prolong this change, congress is not at fault. Various card companies, as well as processors, still seem hesitant to change, even though this change is great for consumers and businesses.