The clock is ticking. Issuers and merchants are largely expected to adopt the EMV smart-card standard by October 2015, but the overwhelming number of U.S.-issued cards do not use the technology.
For CreditCall, the
U.K-based CreditCall, a payment gateway and EMV technology provider, has established a U.S. headquarters in New York City to offer the expertise that it claims can cut several months off EMV conversion projects.
Companies that attempt to complete an EMV conversion without outside help often underestimate the time and money involved in taking on such a complex project, says Jeremy Gumbley, CreditCall's chief technology officer.
“You could spend a lot of time writing the software, but it could fail during certification testing,” Gumbley says. “There are a number of quirks in certification, sort of the black hole of the project.”
Because CreditCall has been creating EMV conversion software and hardware for more than 10 years, Gumbley says his company “has stubbed our toes years ago and solved all of the problems” associated with EMV certification.
CreditCall announced the launch of new EMV software libraries Nov. 6 at the Cartes 2012 payments industry conference in Paris, France, with the pitch that the new software can “reduce terminal development cycle time by as much as 18 months.”
Gumbley estimates that, on average, a proper EMV conversion can take place in as few as three months and save a company as much as $2 million in development costs over going it alone.
CreditCall currently focuses on EMV conversion at ATMs, parking meters, and unattended kiosks or cashless machines in mass transit, but the company intends to expand its service to the retail point of sale in the near future, Gumbley says.
As merchants face liability shift deadlines in 2013 and 2015, they will continue to question the cost and the overall wisdom of an EMV conversion, Gumbley says.
“EMV is not a bad investment because it will always represent a technology foundation that will go hand-in-hand with other technologies, such as Near Field Communication,” one of the major technologies behind mobile payments, Gumbley adds.
“Payments will always evolve, but EMV is not a flash-in-the-pan; it will be here a long time,” Gumbley says. “Even if there is some new technology after NFC or the form factor changes, the EMV chip will be the stepping stone to something else.”
When retailers are ready to begin EMV preparations, they will likely draw on the expertise of a European company because they will want “that base of expertise,” says Gil Luria, industry analyst with Los Angeles-based Wedbush Securities.
However, U.S. retailers simply are not in a hurry to upgrade technology at this time, Luria adds.
“They just upgraded their terminals within the last two or three years to be compliant with PCI [data security] standards, and they are happy with their new terminals,” Luria says. “In their minds, there is no urgency to replace them at this time.”
Under that scenario, Luria says it would not be surprising to see large numbers of retailers wait until the card brands’ liability shift deadline in 2015 — or even later — to initiate EMV adoption.
Essentially, many retailers are not convinced a good business case exists for EMV adoption and also view the argument about increased security threats as “the boy crying wolf,” Luria says.
As such, the card brands had to establish liability-shift deadlines, Gumbley says. “Without deadlines, the conversion won’t happen,” he adds.
