Report: U.S. EMV Migration Price Tag to Exceed $10 Billion (June 27, 2013)
June 27, 2013
As more U.S. card issuers solidify their plans to migrate to the EMV chip-card standard by October 2015, the estimated cost of the effort is settling in at $10 billion to $11 billion, according to a new report from Aite Group. Most U.S. issuers will launch with chip cards requiring only a signature to verify POS transactions, to minimize behavioral changes for cardholders, writes Julie Conroy, Aite Group research director, in her latest report “EMV: A Roadmap and Guidebook for the US Market.” But some issuers will initiate EMV programs with the chip-and-PIN approach more common around the world, which may cause some confusion among consumers and at the POS when the U.S. payment network liability shifts go into effect in approximately two years, Conroy suggests. Drawing upon insights gathered from a broad range of executives at U.S. financial institutions, payment networks, regional debit networks and vendors in the EMV supply chain, Conroy predicts 75 percent of the U.S. population will be using EMV cards for credit and debit card purchases by the end of 2015, and 97 percent will be transacting with EMV cards by 2017.
Introducing EMV typically slashes counterfeit POS card fraud, but there is a persistent concern that the chip-card migration may cause card-not-present (CNP) fraud to spike, Conroy warns. “As the opportunity to perpetrate counterfeit card fraud at the POS dries up, fraudsters will increase their card-not-present fraud, application fraud and account takeover attempts,” she says, noting that the majority of U.S. issuers Aite surveyed recently said their overall card fraud losses have increased 30 percent to 50 percent in 2012 over the previous year due to several major data breaches, among other factors. Top U.S. payment networks recently began stepping up efforts to block CNP fraud with innovative new services.