American Express Co. hopes to gain a larger role in shaping the direction of international card payments by taking a 25% ownership position in the global standards body EMVCo LLC.

The New York card company and the London organization announced Tuesday that American Express would become the fourth owner-member of the group, which manages issues related to payment cards that depend on chips, rather than magnetic stripes, to authenticate transactions at the point of sale and automated teller machines.

Susan Hillel, American Express' senior vice president of global network operations, said the stake would be especially important for her company in Europe, where regulators are mandating the adoption of the Europay, MasterCard, Visa security standard across the Single Euro Payments Area.

"It gives us a seat at the table as EMVCo expands into other technologies," such as contactless and mobile payments, she said. "Our hope is that all of these emerging technologies would ride on and leverage the EMV specification."

Ms. Hillel said Amex has not endorsed the idea of introducing EMV in the United States, which is the largest card market and has not signed on to the chip-card specification.

"Our role as a network is to enable the American Express network to handle the EMV contact and contactless payment. We support our business partners," such as U.S. issuers, merchants, and acquirers, Ms. Hillel said. "If they make the business decision" to adopt EMV, "based on their business conditions and their reading of market conditions, then our role is to support them in that."

By taking a stake in EMVCo, American Express gains representation on the organization's executive committee and board of managers, in addition to equal participation in its working groups. Ms. Hillel said the company had not previously participated in the organization's activities, although it has issued EMV-compliant cards in the United Kingdom and plans to do so in the rest of Europe.

EMVCo marks its tenth anniversary this month. It was formed in February 1999 by Europay International and the card associations that were predecessors to MasterCard Inc. and Visa Inc.

MasterCard bought Europay in 2002, and the Japanese card network JCB Co. Ltd. joined the organization in 2004, giving EMVCo its current form.

Most observers agree that EMV, which requires cardholders to enter a PIN to initiate purchases at the point of sale, offers improved security over traditional magnetic stripe cards.

Some analysts have warned that the financial industry's reluctance to adopt EMV in the United States will make the payment system here more vulnerable to fraud as criminals back away from markets with tighter security.

George Peabody, the director of emerging technologies at Mercator Advisory Group Inc. in Waltham, Mass., said there is little chance that U.S. banks will adopt EMV in the near future, mainly because of the expense.

Chip cards cost $1.25 to $1.50 each, compared with 20 cents for mag-stripe cards, Mr. Peabody said.

Banks are not the only ones with cost concerns, he said. "U.S. retailers are reeling. If they have to pay for" the readers needed to accept EMV cards, "it's not going to happen anytime soon."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.