MasterCard Exec at CARTES: EMV Migration + NFC Handsets = Innovation Explosion (Nov. 5, 2014)
The U.S. EMV migration couldn’t come at a better time, according to executives discussing chip cards on a panel today at CARTES in Paris. Decades ago EMV was a narrower concept designed primarily to protect against counterfeit card fraud at the POS, but within the past few years EMV has evolved to become a broader and more versatile technology to enhance payments security, panelists suggested. “EMV is growing up,” said Oliver Manahan, MasterCard vice president of advanced payments and a panel participant. “EMV now encompasses tokenization and eventually we’re going to see it playing a role in providing greater security for mobile and cloud-based payments, which is increasing the value of the EMV investment for industry participants,” he said.
The U.S. will see a huge surge in EMV adoption next year, Manahan noted. Currently about 20 million EMV cards are in circulation in the U.S., but by the end of next year that number will soar to 575 million out of 1.2 billion total payment cards in the U.S., he said, citing data from the Payments Security Task Force. Significantly, about half of all U.S. consumers are expected to have an NFC-ready smartphone by the end of next year, Manahan added. “The combination of EMV improving payment security and more consumers with access to mobile payments will unleash an explosion of innovation,” he predicted.
American Express, which has vast experience issuing EMV cards in global markets for many years, is moving aggressively to equip U.S. consumers with EMV cards across all its portfolios, Karen Czack, American Express’ vice president of global chip cards, told attendees. For several months American Express has been issuing EMV cards to any credit card customers that request one, and next year it will begin converting a critical mass of cards in its portfolio to the chip standard, she said. “In 2015 we expect to begin enabling our prepaid cards with EMV,” Czack added.
If the experience of other markets is any guide, within a year or two, U.S. consumers will begin to demand EMV, Erik Vlugt, vice president of global products for VeriFone, contended. “Consumers are gradually becoming aware of EMV, and as issuers ramp up EMV education initiatives, there will come a point when consumers will view any transaction without a chip as a less secure option.”
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