THE PATH TO EMV
EMV has brought secure, convenient, and groundbreaking payment services into the spotlight. Major payments brands have already announced roadmaps for the U.S. migration from magnetic strip cards. Yet EMV cards have been circulating in the U.S. since 2010, and according to Gemalto, there have been some unexpected surprises along the way. One surprise, of course, was the Target breach that brought payment security to the public audience.
Despite the unexpected breaches, Gemalto indicates that the U.S. is on track with EMV deadlines, as October 2015, when fraud liability shifts to any party that has not implemented the solution, is fast approaching. The change will clearly not be overnight – it will be gradual, and most likely achieve ubiquity in 2019.
THE RACE IS ON TO CONTACTLESS
Over the past 4 years, issuers and other players have silently been migrating. Now, the race is on. Banks are transitioning full card portfolios to EMV, and merchants are coming up with software and POS solutions that are compliant with EMV. It has become a “flurry in activity,” which is also influencing certain aspects of the migration.
While contact EMV can slow down the POS transaction time many countries have also included the migration to EMV contactless and mobile. UK and Australia integrated contactless card and mobile EMV in their deployment strategy as it made sense from a user perspective.
Contactless technology, however, has had a difficult past when it was first launched, so banks are hesitant to adopt it again. However, this time, the market is more developed and there now exists infrastructure to support this type of technology in addition to the EMV migration, which is creating a perfect opportunity for simultaneous contactless and mobile EMV migration that can reduce future costs to banks and merchants.
BENEFITS OF MOBILE EMV
Users benefit from a quick checkout experience with EMV security as they wave the card over the POS. Customers who prefer to have the option between paying with their phone or mobile but with the same action will especially have something to gain with EMV.
So why not use NFC mobile payment technology instead? According to Gemalto, NFC mobile payment technology, despite the opinion of some, is not a replacement for EMV. NFC is primarily a method of communication between a reader and a phone. It is complementary to EMV, however, as NFC allows the EMV technology to be used on the mobile device for payment.
At a glance, EMV contact, contactless and mobile technology in the U.S. provides the following:
1) Smart card technology with hundreds of built-in security features
2) A unique identifier for each card and seal that can’t be cloned
3) Stronger card-present security due to the chip
4) Mobile authentication advancements for online and ecommerce
5) Acceptance in more than 80 countries bringing a more universal way to pay
THE DEBATE ON CHIP AND PIN VS. CHIP AND SIGNATURE
Many countries around the world refer to EMV as “chip and PIN” since it is associated with an electronic chip on the card which requires a PIN code for usage. The PIN is another layer of security in protecting the cardholder. In other countries, the PIN was used when EMV offline transactions occurred to guarantee mutual authentication between the cardholder and the card, where the need was great. The U.S. currently has the ability to make online transactions, so while “chip and PIN” offers an additional layer, “chip and signature” is considered by some as sufficiently secure for face-to-face POS transactions that are authorized over the online channel.
For more on the U.S. migration to EMV, how we can benefit from it, and how it works, download the Gemalto infographic by clicking the button below.