RANCHO CUCAMONGA, Calif.–EMV is coming, that’s certain. But what’s not clear is the final form in which EMV will be delivered.
As a result, CO-OP Financial Services is recommending credit unions spend the next six months learning more about the technology and their members’ payment card needs before making a move to convert the card base to EMV.
EMV, also referred to as chip and PIN and/or chip and signature, is considered more secure than mag-stripe. EMV cards feature a micro-processing chip that stores cardholder data securely, helping reduce the number of fraudulent transactions resulting from counterfeit, lost, or stolen cards. The technology is widely accepted in Europe.
While Visa and MasterCard are driving hard toward EMV implementation in the U.S., with liability shift deadlines in place for both merchants and issuers (CU Journal Sept. 24 and May 7), Dr. Kathy Herziger-Snider, VP of products at CO-OP Financial Services, told Credit Union Journal there are too many unknown issues now around EMV–what the apps will look like, how applications will reside on the chip card, the format of the chip, and the routing.
'Too Many Unknowns’
“CO-OP is working on the tech side to support EMV-enabled transactions on the switch whenever our credit unions are ready to do that,” said Herziger-Snider. “But we are not suggesting credit unions go out now and begin kicking off EMV projects because it’s expensive to issue the cards and, as I said, there are too many unknowns now. Use this time to learn more about EMV and what your members want with their payment cards.”
CO-OP has rolled out its Ask the Expert web page (www.co-opfs.org/EMV), a forum for credit unions to submit questions and receive replies from CO-OP’s team of EMV subject matter experts, and offers a white paper and blog on EMV.
“The first phase is education, information, and strategic planning, and we want to help credit unions get through this phase,” Herziger-Snider said.
Herziger-Snider does not foresee lengthy delays around EMV implementation deadlines, with Visa requiring all processors to support chip transactions by April 1, 2013. MasterCard is working with acquirers to ensure infrastructure readiness by April 2013. Visa, too, has stated it will shift fraud liability to merchant acquirers by Oct. 1, 2015, if the merchant does not have a chip-card terminal.
No April Fools
“Yet, realistically, the first day of April next year to have all merchants ready to handle EMV transactions?” posited Herziger-Snider. “There are tens of thousands of merchant acquiring devices and there is no way they will all be upgraded by then. EMV implementation in other countries typically has taken ten years, and we are looking at mandates in the three- to four-year timeframe. It’s just going to take time. A lot will get fleshed out in the next six months.”
For info: www.co-opfs.org
