TSYS Examines the Current State of Chip Migration

It’s no secret that U.S. firms have been slow to embrace EMV. But TSYS sees some real benefits for companies migrating to the new technology — chief among them efforts to combat credit card fraud, and save money in the process.


Forbes estimates that the total cost of fraud could top $10 billion unless the U.S. payments industry moves to make progress in chip cards by the end of the year.

As has been widely noted here at PYMNTS, the movement by U.S. firms to embrace chip card technology by the October 2015 deadline has been a glacial one, with only a minority of merchants ready at present for the transition. TSYS says that roughly 47 percent of its direct terminal base has been “chip-enabled.”


Looking further at the numbers shows just why chip card adoption should be accelerated stateside. Other nations that adopted such payments security technology enjoyed marked decreases in fraud after putting “chip and pin” payments in the field.

For example, within four years after EMV adoption, Canada saw fraud incidences decline 79 percent, which would represent a 32 percent compound annual growth rate. Similarly, across the pond, the United Kingdom showed a 75 percent decline over the same four-year time frame, which in turn translates to a 29 percent CAGR.


TSYS has a few ideas on what EMV adoption will look like toward the end of this year, a time period that of course encompasses the October deadline. The company estimates that as many as 80 percent of its clients will be issuing chip cards by the end of the year, a statistic that augers well for fraud cost control. But there is still room for improvement, as less than 60 percent of actual POS locations will in fact be chip-enabled despite the hundreds of millions of chip/EMV cards that will be “out in the field” by then.

Key to continued industry efforts, TSYS said, will be education and preparation. The company has encouraged its issuers through a Countdown to Chip Card webinar series, to not only move to meet the October shift by issuing chip cards, but to implement new tools to combat the CNP fraud that has increased dramatically in other markets as they made this transition, including advanced 3-D Secure solutions and fraud alerts, along with cardholder education.

To better understand this data take a look at TSYS’ infographic “The Current State of Chip Migration.” 

Click to download the PDF version… 

The Current State of Chip Migration Infographic