ABA Banking Journal - July 2011 - (Page 24)
cover story | card trends
By Lisa Valentine, contributing editor
hat does the United States, Chad in sub-Saharan Africa, and parts of the war-torn Middle East have in common? They don’t accept EMV-chip payment cards at point-of-sale terminals. Around the world, more than 1.2 billion cards and 15.4 million terminals are EMV-compliant. And the 1 billion cards in the U.S.? Magstripe only. “The U.S. is the big black hole,” says Toni Merschen, formerly responsible for developing and deploying global EMV programs at MasterCard and now principal of a consulting firm in Simmerath, Germany. “U.S. cards are no longer an international method of payment,” he adds. EMV, which stands for Europay, MasterCard, and Visa, is an open standard for interoperability of global payments maintained by EMVco, a consortium of American Express, JCB International, MasterCard and Visa. EMV is not new. Its specifications for embedded microchips were introduced in the late 1990s and have
been stable since 2002, says Merschen. Europe has been a long-time proponent of EMV (some countries there subsidized its development) and the chip technology is making serious inroads into Asia. Canada is aggressively rolling out EMV chip cards to its citizens as well. Indeed, the U.S. is the only G-20 country to continue to support magstripe payment technology. slow out of the gate To date, only a handful of U.S. banks and credit unions are adding EMV chips to traditional magstripe payments cards. They include Wells Fargo, JP Morgan Chase, Citibank, U.S. Bank, United Nations Federal Credit Union, and Silicon Valley Bank. The reason these cards never established a base here was because there wasn’t a business case for it, observes ABA’s Nessa Feddis, vice-president and senior counsel for regulatory compliance. Part of that, she says, was resistance from retailers who did not want to pay to upgrade or replace card readers. Even today, only
24 | ABA BANKING JOURNAL | july 2011
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