Instead of treating the migration to chip as solely a matter of compliance, many smart companies are using the technological disruption caused by EMV as a catalyst for positive change.
They are examining the convergence of payments and mobile, envisioning whats possible, and embracing innovative solutions that become game-changers in the new world of connected commerce. The EMV liability shift will drive POS upgrades that will, in turn, create new mobile point of sale and m-commerce engagement experiences influenced by advances in mobile technology.
It is estimated that by the end of 2015, 1.1 billion EMV cards will be issued in the United States. And while that is no small task for issuers, it pales in comparison to the complexities involved in the upgrade or replacement of an estimated 13 million point-of-sale (POS) systems.
The U.S. payment acceptance market is significantly different than most other markets that have already migrated to EMV. Throughout much of the world, stand-alone terminals are used to process payment transactions. Here in the US, it seems that every industry such as retail, restaurant, lodging, beauty, healthcare, and automotive has deployed specialized software, and payment functionality, which is often integrated into the overall solution. This is not a big deal for mag-stripe implementations; however, add EMV and NFC, and the stakes are magnified tenfold.
The EMV compliance process consists of multiple steps that can also help deploy mobile point of sale and m-commerce:
The card-accepting device must be Type Approved to satisfy EMV and NFC Level 1 (two distinct hardware certifications) and Level 2 requirements for software and must pass complex PCI, EMV, and NFC lab certifications with the card brands.
For mPOS solutions using smartphones and tablets, an additional point of complexity is introduced with the need to support a variety of Operating Systems and unique apps to support iOS, Android, Windows 8 and Windows Mobile platforms.
The payment application software must be validated to each card brands specifications.
The connection between the POS terminal fixed or mobile phone/tablet and each acquirer must be certified to ensure that dynamic card-level data is being properly passed in the authorization and clearing messages.
The entire end-to-end transaction flow must be validated from device, through POS solutions to each acquirer and every card brand, and then certified ADVT and Mtip as required by the brands of the member bank.
Leveraging the disruption caused by EMV gives solution providers an unprecedented opportunity to enable a new set of simple yet robust features that extend beyond the traditional confines of payment transactions to a much broader array of business opportunities. In making the shift to EMV, solution providers can combine or replace the POS with cloud-connected smartphones and tablets that help fuel a highly flexible ecosystem, one that goes far beyond accepting payments.
The result doesnt simply take the sting out of EMV compliance; it serves as a launch pad for introducing compelling omnichannel marketing and payment opportunities, all of which extend well beyond the traditional POS paradigm.
Responding to market trends requires focus and experience that can quickly and effectively be applied to the evolving demands of this new world of commerce. Its time to break the cycle of legacy software development on proprietary systems and embrace an innovative solutions delivery model that results in efficiencies for everyone involved. The good news is that both traditional and new-age POS players can embrace tablets and phones to develop innovative industry-specific solutions that help merchants connect with customers and manage their business, while leveraging tools and resources from mPOS payment experts to easily integrate proven and certified payment applications that support mag-stripe, EMV chip & signature, EMV chip & PIN, and NFC for digital wallets like Apple Pay.
Its important to note that mPOS and tPOS (tablet POS) solutions are not reliant on a one-size-fits-all model; end-to-end capabilities must be delivered as a turnkey system, or in combination with individual solution elements matched to client needs.
Its a fascinating time to be a part of the payments ecosystem. The convergence of payments and mobile commerce is spawning a new array of possibilities. Companies that embrace EMV not as a burden but as a catalyst for positive change and as opposed to screaming uncle! will be best positioned to win the day.
Bill Nichols is CEO of Anywhere Commerce.
