DES MOINES, Iowa-The costs for EMV plastic are expected be higher than mag stripe, especially in the early going. But wait too long to jump in and the CU may lose transactions to competitor's EMV cards.
It's a balancing act many CUs will work through, a number of payment experts told Credit Union Journal. They noted that EMV cards, too, will carry both mag-strip and chip technology for a while, which adds to the cost.
Jeff Russell, senior advisor for The Members Group, said that while it's difficult to estimate the cost for chip cards over the next year or two, he has heard that the price could be double the ticket for mag-stripe plastic.
"The card production facilities need to ramp up volume to bring their cost-per-card down," said Russell, suggesting MasterCard and Visa could help by saying to card producers, "'Over the next three years we will have close to 100% of issuers across the country adopting EMV because of our rule,' and maybe step in and guarantee some volume to drive costs down. EMV adoption would move a lot faster if you could issue a card that is just moderately more expensive than a mag stripe."
Merrill Halpern, AVP at the Halpern, AVP at New-York based United Nations FCU, the first CU in the country to migrate to EMV, without disclosing the CU's costs said the price for EMV is not double current mag-stripe expenses.
John Postle, general manager of JHA Payment Processing Solutions, Seattle, reminded the pitfalls that can come with waiting too long for the chip-card technology price to come down and other FI's chip cards get in your members' hands. He cited the potential for the CU's mag-stripe to get shoved further down in the wallet, and eventually, its EMV card as well.
