Post by Zilvinas Bareisis
Usually, during the Autumn season, I make a few trips to the United States for conferences and client visits. This year was no exception and I have recently come back from two trips to Las Vegas and San Antonio. EMV migration in the US was high on the agenda during both visits and I came back with two takeaways: 1) the US market is finally serious about EMV and preparations are going full steam ahead and 2) I am glad it is happening.
All the data breaches at retailers, from Target to K-Mart Sears, have spooked the market and stirred it into action. Some of the major challenges, such as reconciling EMV with Durbin/ Reg II, have been resolved – on November 4, Vantiv announced it became the first US acquirer to successfully complete a debit EMV chip transaction compliant with Durbin. Most of the issuers are in the planning stages and beyond, even with debit. On September 30, Bank of America became the first major US bank to announce that all new debit cards with be EMV, while existing cards would be replaced at expiry.
I am planning to soon publish a report on the US EMV migration, which will discuss what is happening in the market now and will address a number of questions we frequently get from clients, including some of the more advanced EMV topics, such as scripting, PIN management and multi-functional cards. In this blog I just wanted to share a personal story.
Until the cards and terminals migrate, the fear of fraud at the US retailers is palpable, to the point where it is starting to impact consumer experience. During my brief shopping break I wanted to pay with my UK-issued chip card. As the amount was over $75, I was asked for a customer ID. I offered my UK driver’s license, which the cashier started diligently copying by hand onto the printed receipt. As it was a foreign license, he wasn’t sure which was what, so had to call his supervisor to check what exactly he should be copying. When he was done, I thought that would be the end of it, but unfortunately, I was mistaken. The cashier then took my card, placed the receipt on top it and started rubbing it with a pen to get the imprint of the embossed details on the card! Apparently, he had to do it because the amount was actually over $150… I could scarcely believe this was taking place in the 21st century… On a separate note, I must admit, 10 years of EMV in the UK made me deeply suspicious whenever at a restaurant I have to hand in my card and the waiter just runs away with it. In Europe, the waiter brings a handheld terminal to the table, I enter my PIN and the card never leaves my sight.
I am not saying that this is an everyday experience for all US consumers these days. Perhaps I happened to go to a retailer with particularly strict anti-fraud policies, or they recognised a foreign card and wanted to take extra precautions, or I was simply unlucky. But I did not enjoy the experience. This is also not a smug boast how “we have it better here in Europe.” I actually think that the US is a hotbed of innovation and creative solutions emerging from the US such as Apple Pay are pointing to the future of what lies ahead for many of us. However, EMV will help with the “here and now.” Of course, there will be a learning curve for the US consumers as they get used to new chip cards, and there will be teething challenges during the migration, but it will be worth it for the market as a whole. And as a regular visitor, I just can’t wait for the US to migrate to EMV.