A year after the official launch of chip payment technology in the US, Visa is claiming steady progress, with the country already its largest EMV card market and fraud rates falling sharply.
Last October the US finally followed much of the rest of the world when Visa and other card schemes switched the liability for fraud-related losses to retailers that have not upgraded their hardware for EMV.
The switch has been far from plain sailing, with some merchants dragging their feet, customers grumbling about long transaction times and lawsuits against Visa from major retailers over the failure to mandate chip and PIN.
However, a year on Visa says that it has seen "steady" progress and that there are now more than 1.46 million chip-enabled businesses and 363 million chip-enabled Visa cards. The number of Visa chip transactions surpassed half a billion in August, representing a 1000+ per cent annual increase.
Meanwhile, businesses that have completed their transition to chip terminals benefited from a 47% reduction in counterfeit fraud in May compared to the same period a year earlier, although Card Not Present fraud is rising sharply.
Stephanie Ericksen, VP, risk and authentication products, Visa, says: "Thanks to efforts across the ecosystem, we’re seeing a positive impact on counterfeit fraud. We’re focused on continuing that momentum to bring counterfeit steadily down and simplifying the way businesses can adopt chip technology."
While Visa talks up progress, retailers are complaining that delays by the card industry have left thousands of new chip readers unused and consumers with far less improvement in security than what was sought by merchants.
This latter relates to the card scheme's insistence on the continuing use of chip and signature at the checkout, a factor which has led to friction between the card companies and merchants and sparked a spate of law suits.
“Most major retailers have done their part, but the card industry continues to drop the ball,” says Mallory Duncan of the national Retail Federation. “Retailers have spent billions of dollars to install the new equipment but card companies have failed to sign off on the installations in a timely manner. Many retailers have had new chip card readers sitting next to their cash registers for a year waiting for the card companies’ blessing. We wish they cared as much about security as we do.”
A recent NRF survey of members found that 86% of retailers plan to have the new Europay MasterCard Visa chip card technology fully implemented by the end of 2016. Of those who do not yet have EMV in operation, 57% said they had already installed the equipment but were waiting for certification by the card industry so they could turn it on. And 60% of those said they had been waiting six months or longer.
While the delays are frustrating retailers, Visa is already looking ahead, highlighting the fact that the introduction of chip payment technology in the US market has coincided with the arrival of Apple Pay, Android Pay, and Samsung Pay. Because card and mobile-based payments use the same global security standards and encryption technologies, they offer flexibility to merchants who want to offer both options, argues the firm.
"The number of consumers worldwide who will own smart phones is expected to grow to 2.5 billion by 2019. That provides a great opportunity to accelerate the adoption of chip payment technology and introduce new ways to authenticate consumers through technologies such as biometrics and device ID," says Ericksen.