On August 9, 2011, Visa announced a plan to migrate the US payment industry from magnetic stripe to chip-based cards and, in doing so, to attack counterfeit fraud at its core.
In short order, all of the other major card networks were aligned on a migration to “EMV”, a global specification for more secure, “smart” card technologies.
The success of this plan, which required replacement of over 1.2 billion cards, conversion of over 10 million acceptance locations and re-training of over 200 million cardholders, was tied to a shift in fraud liability from issuers to merchants, if the latter failed to participate.
Despite the incentive to reduce fraud losses, only the largest and most nimble moved quickly enough to begin issuing cards in advance of the October 1, 2015 liability shift date defined by the networks.
For many of the medium and smaller-sized banks, thrifts and credit unions, the conversion of card portfolios, processing systems and vendor agreements was too daunting a task and too low a priority when compared to the challenges of recovering from the Great Recession, managing through the seemingly never ending string of new regulations, and, ironically, dealing with the massive card data breaches of Target, Home Depot, K-Mart, Albertsons and many others.
Those banks that have been able to begin their conversion have immediately recognized that the process would neither be quick nor easy and would require investments of scarce capital, time and resources.
Join me for this session where I will offer information from the issuers’ perspective, highlighting the thought process, key considerations, and rationale for making or possibly delaying the conversion to EMV.
Gary B. Yamamura
Edept LLC
g_yamamura@msn.com