The six-month deadline extension for Canada’s merchants to convert to EMV chip-and-PIN technology points to certain technical difficulties some have encountered during the lengthy process, observers say.
Visa Inc. and MasterCard Worldwide on Sept. 24 separately announced they have postponed their deadlines for shifting liability to merchants for fraudulent transactions that chip technology could have prevented to March 31, 2011. Visa previously had set its deadline for Oct. 1, and MasterCard’s deadline was Oct. 15.
American Express Co. recently announced its own liability-shift deadline is Oct. 31, 2012 (
Card issuers will continue to absorb the liability for fraudulent transactions for six more months, the networks said, noting the deadline extension does not affect Canada’s long-term overall migration to EMV by the end of 2015.
EMV is an international standard for chip-based payment card transactions that requires a PIN to authenticate the cardholder, providing an additional layer of security over signature-based magnetic stripe cards.
“Visa and its clients recognize that this one-time extension allows merchants to temporarily delay the adoption of chip technology until after the busy holiday shopping period, should they choose to do so,” Tim Wilson, head of Visa Canada, said in a statement.
Many merchants already have completed the transition to EMV, but others “need more time,” Oliver Manahan, MasterCard Canada vice president, advanced payments, said in a statement.
Visa in 2003 announced plans to support Canada’s shift to chip-and-PIN technology to reduce fraud; other Canadian payment-industry participants soon afterward joined the movement, which got under way in 2004.
The U.S has not announced plans to adopt EMV technology, although some observers say card-skimming and other types of fraud EMV could prevent are likely to rise as the U.S. remains the only large country in the world still relying solely on mag-stripe card technology (
The networks’ deadline extension should give merchants enough time to resolve issues preventing EMV adoption, Catherine Johnston, president and CEO of the Advanced Card Technology Association of Canada, a nonprofit payments-industry association based in Ontario, tells PaymentsSource.
“There have been a number of hardware complications (for merchants adopting EMV) that were not evident in other countries, nor were they evident during the pilot,” Johnston says, declining to detail the exact technology issues or types of merchants involved. “There were some unique situations related to the Canadian environment that needed to be resolved, and we think the networks’ decision to delay the liability shift is a prudent one.”
The association predicts more than half of Canada’s 800,000 merchant-acceptance points will accept EMV cards by the end of this year, by which time it also expects approximately 70% of the country’s estimated 105 million credit and debit cards to be equipped with EMV chips.
Interac, Canada’s PIN-debit payment network, previously announced that all Canadian ATMs must be EMV compliant for domestic transactions by Dec. 31, 2012, and that merchants no longer will accept domestic mag-stripe transactions at the point of sale after Dec. 31, 2015.
The Advanced Card Technology Association of Canada recently formed an “issues alert team” comprised of issuers, acquirers and merchants to identify problems that are cropping up in the payments industry and ways to overcome them, particularly around EMV conversion, Johnston says.
“Time and again, no matter what country it is, we always find that merchants need more time,” converting to EMV technology, she says. “We are confident that both Visa and MasterCard have plans in place to make sure the problems they’ve identified will be resolved within the next six months.”
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