Visa Exec: EMV Migration on ‘Critical Path’ (Feb. 3, 2015)

Written by FinTech Futures
3rd February 2015

The U.S. payments card industry is on a “critical path” to EMV card migration over the next eight months but several challenges remain, Kimberly Lawrence, Visa’s senior vice president, global corporate initiatives, said today during the kickoff presentation at the Smart Card Alliance’s Payments Summit in Salt Lake City. The EMV migration coincides with other market moves solidifying a broad shift to mobile payments, including the successful launch of Apple Pay, she said. Large card issuers and merchants are making major strides in upgrading to the chip card standard ahead of the October 2015 EMV liability shift. But the path to migration will have some bumps, she cautioned. “We’ve made a lot of progress, but it’s a little too early to celebrate.”

Tens of millions of EMV-enabled credit and debit cards are in consumers’ wallets or en route now, as issuers reissue chip cards to certain segments of customers or upon request, Lawrence said. Credit cards are well ahead of debit cards in the upgrade process, but EMV debit card issuance in the U.S. is about to explode. Two major issuers recently began issuing EMV debit cards; they include Bank of America and one other large bank whose name Lawrence did not disclose.

Visa forecasts that by the end of this year, U.S. EMV compliance rates will be 70 percent for credit cards; 41 percent for debit cards and about 50 percent for merchants. Smaller issuers and merchants may lag behind the largest issuers and merchants, which generally are on track to make the October migration date, Lawrence suggested. “There’s a significant amount of work to do, particularly to bring both debit and credit implementations together and getting all stakeholders moving collectively forward at the same time,” Lawrence tells Paybefore. “It’s really about scale and the amount of work that’s left to do.”

The U.S. EMV migration has faced unique hurdles compared with other markets, noted Randy Vanderhoof, Smart Card Alliance executive director. The challenges come with the immense size and scale of the U.S. payments card market and the diversity of cards in circulation, he noted. “The unique way we deal with multiple types of cards, including credit, debit, prepaid and stored value, creates challenges,” according to Vanderhoof. Issuers are rolling out EMV-enabled cards as quickly as possible, based on feasibility and particular business cases.

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