SEATTLE-U.S. EMV adoption could take off quickly once acceptance reaches a critical mass, say several payments analysts who share advice on implementing the chip card.
"If you start seeing merchant adoption pick up and you want to be the first on the block to have the EMV card, you probably need to start thinking about that now," said John Postle, general manager of JHA Payment Processing Solutions. "This is a budget item you have to plan for."
Postle shared that JHA has already worked on an EMV project with Visa and has another in the queue with MasterCard, and said he has learned EMV implementation covers a lengthy project cycle. "Once you are in the queue with MasterCard or Visa it takes around six months to complete, that includes testing and certification."
Lead time is also needed to consider how bringing on EMV will impact staff, cardholders and the CU's plastic inventory, said Postle. "If the credit union has mag-stripe stock on hand for a couple years, maybe they don't replenish that."
Kenton Potterton, VP of product management for card payments at PSCU, St. Petersburg, Fla., recommended that credit unions begin now to get their feet wet with EMV. He suggested that the focus today should be more on members who use their credit cards internationally, since mag stripe is often declined by merchants in many countries that have migrated to EMV. "Rather than doing a mass reissue of credit or debit cards, we have been working with many clients on smaller-scale rollouts of EMV for members who travel overseas."
Credit Unions Line Up
PSCU has a number of credit unions lined up to introduce EMV for members who need to use their credit cards outside the U.S. "We started off with credit cards because most overseas transactions occur on credit rather than debit," explained Potterton.
The company has also encouraged credit unions to consider offering EMV on prepaid cards. "Members keep their mag-stripe credit card to use in the U.S., but when they travel they put some money on the prepaid EMV card so they know it will be accepted overseas," said Potterton.
Potterton said credit unions like issuing prepaid EMV cards for members who travel because they don't have to do a reissue of credit and debit cards, create new BINs, and go through a certification process with Visa or MasterCard. "That's a lot of work for the credit union and processor. It's a simpler, more efficient model to follow to issue EMV for smaller member segments."
'This Takes Time'
With a full EMV implementation, the credit union has to not only go through the certification and quality assurance process with the payments network, it has to procure the new plastic.
"As I said, all this takes time," reminded Potterton, who said that the queues to roll out EMV with Visa or MasterCard are beginning to get clogged. "I believe EMV won't fully arrive until mid-2014 or 2015. However, if I am wrong and it catches on faster, the credit union will need to begin preparing now."
Jeff Russell, senior advisor for The Members Group in Des Moines Iowa, recommended that credit unions start now to understand the rules around EMV implementation and to learn their members' needs. "Are your members early adopters? Late adopters? Understand all the things that will shape your plan for rollout of EMV."
Jim Park, president of CU24, Tallahassee, Fla., warned that credit unions should not wait and play catch-up on EMV. "There is a downside, and more than just from lower card revenues. There may be potential costs passed onto you (if you lag too far behind), perhaps by merchants or fines by the networks."
