Community

I'm guessing lot of banks used to make such announcements in the '1950s! But I concede that it's a giant leap for Starling, even if it's only a small step for banking!!

@MariteFerrero: Something else could equally well get there eventually - EMV is 20 year old technology, there's nothing sacrosanct about it. Besides, the plaintiffs have insinuated that the certification may never happen:  

“Class members such as the plaintiffs here, could not timely comply with the standard, no matter what they did, because the Defendants refused to, or were unable to, ‘certify’ the new equipment by the deadline – or, indeed, ever,” the complaint reads.

@MariteFerrero: USA is indeed on Chip+Signature. That situation is outside the control of the said two merchants. Under this regime, we're all in agreement that "...there is no point or incentive to deploy EMV terminals over there." Which is exactly my view. That makes the case to stop EMV altogether OR implement Chip+PIN (which is not going to happen anytime soon) OR find other ways to balance convenience with security, as I thought USBank has done well with Visa geoloc technology.

Yet another regulator sitting in an ivory tower and who, I'm sure, uses cash for daily payments and hasn't heard of things like friction.

Sadly, EMV hasn't meant reduced fraud for US merchants. On the contrary, as the two merchants quoted in this FORTUNE magazine article allege, "...despite upgrading to the appropriate terminals, and following the other upgrade rules stipulated by credit card companies, B & R and Grove incurred total losses of close to $10,000 for 88 chargebacks since October 2015. By comparison, both companies had a total of four chargebacks over the same time period in 2014."

So it's equally likely that the RoW will be dragged, kicking and screaming, into non-EMV and non-3DS alternatives that reduce friction and improve conversion rates - in other words, to make credit cards do what they're meant to do, namely, enable business and drive revenues. We're already seeing early signs of it e.g. India has moved from PIN+Signature to PIN-only to no-PIN-no-Signature regime for transactions below INR 2K.

Once upon a time, people using non-Chip credit cards issued by banks in USA did face friction while using them outside USA. However, going by first hand experience during the last 12 months, all that is history:

5 different countries in Europe, 3 different countries in Asia Pacific, ~150 transactions, only 3 declines of 3 US non-Chip credit cards.

Whether they read my above mentioned blog post or not, I'm glad that RoW merchants have realized that single-minded obsession with mitigating fraud is bad for business and have adapted themselves accordingly.

IME, US consumers have lower tolerance to friction and higher expectation of superior CX compared to those in RoW. Kudos to Visa for coming up with just the right way to balance convenience with security for that market where EMV has stumbled and 3DS would be a conversion-killer.

Mitigating Fraud Does Not Pay The Bills

I have read elsewhere that around 50% of wire transfers are made by human trafficking mafia, illicit arms dealers and drug lords. It's high time regulators took heed of this, shut down wire transfers and slashed the size of these nefarious businesses to the maximum amount of currency notes they can carry in suitcases.

A friend of mine was telling me, to travel by public transport from downtown Toronto to a suburb hardly 20 kms away, he has to change 3 different transport companies and buy 3 different tickets. If a onetime affair like transport can't be handled by just 3 different companies in a single city working together, we can imagine the difficulties of so many different insurers and banks working together across so many different countries to make global insurance and global bank accounts a reality. Much as these concepts are great for consumers, I doubt if they'll ever become real anytime soon. Meanwhile, my Citi UK account doesn't automatically get me an account in Citi India - that's the reality and I doubt if it's going to change anytime soon.

@AnthonyWalton:

TY for the clarification. I mostly agree with you but, in the world of innovation driven by mantras like "iterative approach", "fail fast" and so on, I really wonder if anyone cares for testing at all. I've personally experienced the potential reputation damage to a Top 5 UK Bank from the failed launch of a new payment system. However, what really matters is the extent of naivette of fintech startups and their VC investors.