Increasing fraud rates will push issuers to migrate customers to EMV-enabled cards before the October 2015 liability shift on card-present transactions, Aite Group says.
Credit card with EMV chip.
Rising card fraud will drive issuers to migrate 70% of credit cards in the US to EMV (Europay, MasterCard, and Visa*) by October 2015, along with 41% of debit cards, a new report by Aite Group predicts. Credit card fraud rates have doubled since 2007, an debit card fraud is also rising sharply, according to the report.
The beginning of October 2015 is when Visa will implement a liability shift or card-present transactions.
The growing fraud threat, along with other factors such as the difficulty of using magnetic stripe cards overseas, will spur issuers to hasten the issuance of EMV-enabled cards in the fourth quarter of this year, according to the report. Out of the 18 issuers interviewed for the report, eight said that they will start issuing EMV cards to the general public by the end of the first quarter of next year.
This article continues on EE Times' sister site, Bank Systems & Technology.
*Note: EMV chips are microprocessors. Chase bank's FAQ describes them as:
Named after its original developers (Europay, MasterCard and Visa), this smart chip technology features payment instruments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardholder data. This standard has many names worldwide and may also be referred to as: 'chip and PIN' or 'chip and signature'... Chip cards are standard bank cards that are embedded with a micro computer chip. Some may require a PIN instead of a signature to complete the transaction process.