One year has passed since EMV technology arrived in the US credit card market. Chip cards are designed to make transactions safer and they really do this. According to a NerdWallet survey, the majority of consumers approve the EMV liability shift in the US.
Happy Birthday EMV
MasterCard reports 88% of its credit cards are chip-ready, but 67% of all payment terminals in the US aren’t ready to accept chip payments. Visa says 84% of the merchants who aren’t ready to accept EMV are now switching. Taking into account the fact how other countries are adopting EMV chip technology, Visa thinks the upcoming 4-5 years will bring 90% merchant acceptance in the US.
When it comes to the future of payments, EMV is going to improve. This is because more and more merchants are switching to EMV technology, so the experience across stores is going to become more consistent. On the other hand, processing speed is going to improve as well.
According to Stephanie Ericksen, vice president of risk and authentication products at Visa, Visa’s new Quick Chip technology offers a form of EMV with much higher efficiency. Quick Chip generates the cryptogram faster, and the card can be removed in some 2 seconds or less.
Ericksen notes that Quick Chip and MasterCard’s equivalent M/Chip Fast can be used for stores and their card issuers much easier than the EMV standard. Besides, no new hardware is required for these technologies.
Evolution in the Payments Ecosystem
The evolution in the payments ecosystem is not merely based on improvements associated with card-based technologies. Stores consider offering their own payment experiences in apps, focusing on convenience and loyalty.
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Starbucks uses its app trying to combine payment options and loyalty, and more merchants are expected to match this experience. Besides, retailers will perhaps match the easy checkout offered by Uber.
As for chip-and-PIN credit cards that require a PIN and not a signature, these won’t be adopted in the near future because of cost and habit. It is estimated PIN acceptance for credit cards is going to cost issuers over $2.6 million to utilize. It will save them $850 million over 5 years to prevent fraud.
Based on the latest data from MasterCard, EMV has helped merchants minimize payment processing fraud by 54%. Though the progress is slow, but the future is going to be bright.