Is the U.S. Finally Ready for EMV?Theodore Iacobuzio |
The Fed’s ruling on signature debit Interchange levels, while alleviating—if not obviating—Aite Group analyst Julie McNelley’s concerns that 12 cents just wouldn’t be enough to pay for risk management, does beg the bigger question. Because security is still a top-of-mind issue in U.S. and global card circles, and what to do about it is by no means clear.
It may be clearer than it has been, however, because at the same MasterCard Academy of Risk Management (ARM) conference where McNelley made her alarming assessment, she conducted a survey of attendees, which indicates that in the U.S. the ice may be breaking on EMV as the solution to the card security conundrum.
Surveying 76 risk management professionals at the April event, McNelley discovered while malware is their number-one concern, most of them expect that EMV will be the preferred response—if over time. In the words of the Aite executive summary, “…card industry executives no longer believe that EMV in the United States is a matter of ‘if’, but a matter of ‘when’. Risk management executives are also bullish on the prospect of near-field-communications (NFC) making inroads within the next few years.”
The two matters are of course not unrelated. NFC, which requires a chip, accommodates EMV very neatly.
Your agent has a dog in this hunt. Beginning in 1998 and ending not until five years on I constructed and published a series of infrastructure cost analyses of the implementation of chip-based authentication (and hence EMV) in the U.S. It never happened, of course, because merchants didn’t want it, and issuers didn’t want it bad enough. But mobile, in this as in other areas, may change everything.
A new infrastructure cost analysis beckons. But whatever the big number turns out to be, the question remains, who’s going to pay for it? And with what money? Meanwhile, seven years sounds about right.
Topics: Economic Outlook