Card Payments Roadmap in the U.S.: How Will EMV Impact the Future Payments Infrastructure?
Publication Date: January 2013
Increasing counterfeit card fraud led the financial industry to move to smart chip technology for bank cards and to develop the global EMV specifications for bank cards based on chip card technology. The EMV specifications, first available in 1996 and managed by EMVCo, define the global interoperable standard for smart bank cards and the accompanying point-of-sale (POS) infrastructure.
Financial institutions in the United States, Europe, Latin America, Asia/Pacific and Canada are issuing contact or dual-interface EMV smart cards for credit and debit payment or are migrating to EMV issuance. According to EMVCo, approximately 1.5 billion EMV cards have been issued globally and 21.9 million POS terminals accept EMV cards as of Q4 2011. This represents 44.7% of the total payment cards in circulation and 76.4% of the POS terminals installed globally, excluding the United States.
The United States is one of the last countries to migrate to EMV. American Express, Discover, MasterCard and Visa have announced their plans for moving to an EMV-based payments infrastructure in the U.S.
- In August 2011, Visa announced plans to accelerate chip migration and adoption of mobile payments in the United States, through retailer incentives, processing infrastructure acceptance requirements and counterfeit card liability shift.
- In January 2012, MasterCard announced their U.S. roadmap to enable the next generation of electronic payments, with EMV as the foundational technology.
- Discover announced a roadmap that aligns EMV migration dates with MasterCard and Visa in March 2012.
- In June 2012, American Express announced their U.S. EMV roadmap, which aligns migration dates with the other payment brands and states that issuance of EMV-compliant cards in the U.S. will start in the latter half of 2012.
The objective of this white paper is to educate stakeholders across the payments value chain about the critical aspects of deploying an EMV solution in their business environments. The primary stakeholders are issuers, merchants, processors, and suppliers of hardware, software, and support services. Topics discussed in this white paper include:
- A primer on EMV specifications and key implementation options for issuers, acquirers/processors, merchants and ATM operators.
- The key milestones and guidance announced by the payment brands for U.S. EMV migration.
- The relationship between EMV, contactless payments and Near Field Communication (NFC).
- The changes required in the issuing, acquiring/processing, merchant and ATM payments infrastructure to support the different EMV roadmap options.
About the White Paper
The Smart Card Alliance Payments Council developed this white paper to educate stakeholders across the payments value chain about the critical aspects of deploying an EMV solution in their business environments in the U.S. The document is an update to a 2011 white paper, with new content on payment brand guidance and milestones and new and revised content on EMV implementation considerations.
Payments Council members involved in the development of this white paper included: Accenture LLP; American Express; Apriva; Bank of America; Bell Identification B.V.; Booz Allen Hamilton; Capgemini; Connexem Consulting; CorFire; Discover Financial Services; First Data Corporation; FIS; Fiserv; Gemalto; Giesecke & Devrient; Heartland Payment Systems; Infineon Technologies; Ingenico, North America; INSIDE Secure; Interac Association/Acxsys Corporation; JPMorgan Chase; MasterCard Worldwide; Morpho; NACHA; NagraID Security; NXP Semiconductors; Oberthur Technologies; Quadagno & Associates; STMicroelectronics; Thales e-Security; Toni Merschen Consulting; TSYS; VeriFone; Visa, Inc.; Watchdata Technologies; Wells Fargo.
About the Smart Card Alliance Payments Council
The Smart Card Alliance Payments Council focuses on facilitating the adoption of chip-enabled payments and payment applications in the U.S. through education programs for consumers, merchants, issuers, acquirers/processors, government regulators, mobile telecommunications providers and payments service providers. The group is bringing together payments industry stakeholders, including payments industry leaders, merchants and suppliers, and is working on projects related to implementing EMV, contactless payments, NFC-enabled payments and applications, mobile payments, and chip-enabled e-commerce. The Council’s primary goal is to inform and educate the market about the value of chip-enabled payments in improving the security of the payments infrastructure and in enhancing the value of payments and payment-related applications for industry stakeholders. Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects.