Report: EMV Makes Increasing Sense for Credit, Debit Cards (June 10, 2014)
The increasing risk of fraud, the rise of NFC, customer convenience and lower technology costs have combined to make the business case for EMV work for U.S. payment card issuers, according to a new report from Aite Group. Seventy percent of credit cards and 41 percent of debit cards in the U.S. will be equipped with EMV technology by the end of 2015, the report projects. Aite predicts EMV-enabled card issuing will ramp up beginning in the fourth quarter of this 2014—a year ahead of the fraud liability shifts set by the major payment card networks, which take effect in October 2015.
Fraud has been steadily increasing in the U.S. over the past several years, with credit card fraud costs doubling between 2007 and 2014, to 10 cents on every $100 transacted, Aite said. Debit card fraud also is on the rise. Other driving factors in making the case for EMV include the increasing difficulty that U.S. cardholders have using their magnetic stripe cards overseas, the desire to accelerate the U.S. terminal infrastructure upgrade to facilitate NFC payments and the decreasing cost of EMV chips and terminals.
While EMV makes sense for credit and debit cards, the business case for prepaid isn’t yet quite as strong, according to many industry observers. But there are signs that EMV is gaining traction in the prepaid sector. This week, i2c Inc. and Banco do Brasil Americas announced the launch of an EMV-equipped prepaid multicurrency MasterCard. The recent clearing of the EMV debit routing logjam also could quicken the pace of EMV adoption for prepaid.
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