A new forecast of some heavy hitters in the payment card business indicates a majority of credit and debit cards will contain EMV chips by the end of the year. And these same eight financial institutions, which represent about half of U.S. payment card volume, expect 98 percent of cards will have the chips by the end of 2017.
EMV (Europay, MasterCard (News - Alert) and Visa) chips are microprocessor chips embedded in the plastic cards that replace the magnetic stripe as the card authentication method. The chip technology is a superior form of authentication and security as more information can be contained and communicated among the card, terminal and bank or host processing the transaction. Magnetic stripe transactions typically only contain the card number and expiration date.
EMV chips also protect against counterfeit card fraud, since chips generate a one-time use code for every transaction. The new research from the Payments Security Task Force (PST) shows how much the card community is committed to improving security by making the migration to a chip system.
"The industry is delivering on its commitment to continue to provide a secure and convenient way to pay," said Chris McWilton, president, North America Markets. "These numbers show real movement from plans to action as issuers, merchants and others in the payments system engage collaboratively to bring chip cards to the U.S."
"Those in the payments ecosystem have a shared responsibility to collaborate on ways to enhance payments security,” added Ryan McInerney, president of Visa Inc. “Through cross-industry collaboration, the PST has developed tools to support the migration to chip including a program designed to help streamline the EMV testing and certification process and a consumer education website."
The organization also found that at least 47 percent of U.S. merchant card terminals are set to be EMV chip enabled by the end of this year. EMV chip technology is already in widespread use globally, with more than 1.5 billion EMV payment cards in circulation as well as 21.9 million EMV terminals in use. The payment card industry is now working on testing and standards for validating cards and terminals. Card companies are also looking at the use of multiple security technologies like tokenization and point-to-point encryption in combination with chip technologies to further protect against fraud and security breaches.
Edited by Dominick Sorrentino
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