Confusion Surrounding EMV Begins to Dissipate

SALT LAKE CITY -- Confusion surrounding Europay, MasterCard and Visa (EMV) chip standards is slowly beginning to clear up.

During today's sixth annual Smart Card Alliance 2013 Payments Summit, Visa Inc. and MasterCard Corp. announced that they have created separate roadmaps to help address perhaps the biggest EMV concern on convenience store retailers' minds: the liability shift.

Both Visa and MasterCard stated during today’s event that Oct. 1, 2015 is the date when the responsibility for fraudulent transactions regarding point-of-sale (POS) transactions shifts from the credit card company to the retailer. That is definitely a big deal, as Dan Hopping, president and CEO of Next Retail Group LLC, told CSNews Online exclusively in November that "some people are saying the liability [with EMV] could be very big and even wipe out a company."

The liability shift differs among the top two credit card processors when it comes to ATM and automatic fuel dispenser transactions. Retailers will bear the brunt of the liability for such MasterCard transactions starting in 2016, while the liability for such Visa transactions shifts in 2017.

EMV is an open-standard set of specifications for smart card payments and acceptance devices, created to define a set of requirements to ensure interoperability between chip-based payment cards and terminals. EMV chip cards contain embedded microprocessors that provide strong transaction security features and other application capabilities not possible with traditional magnetic stripe cards.

"EMV is here," Carolyn Balfany, senior vice president and group head, product delivery, for MasterCard Worldwide, proclaimed during today's Summit. "We are all addressing a massive education effort that is needed."

Balfany explained that EMV technology is so important because it dramatically reduces counterfeit fraud. "Counterfeit fraud has decreased in Europe and Canada where EMV is being used," she noted.

Conversely, counterfeit fraud is continuously rising in the United States where EMV card technology is not yet being utilized, added Stephanie Ericksen, head of authentication product integration for Visa.

In recent months, retailers have expressed several concerns regarding EMV. For instance, implementing EMV technology will not be simple for convenience store operators, particularly smaller retailers as the costs to implement the technology can be large. Another concern relates to mobile wallet payments as many retailers want to make sure their payment processing systems are compatible with whichever company or companies become strongest in that arena.

Isis’ Chief Sales Officer Jim Stapleton took part in the Summit. Isis -- a joint venture among Verizon Wireless, AT&T Mobility and T-Mobile USA -- is currently one of the largest players in the mobile wallet space.

Isis officially launched on Oct. 22 in Salt Lake City and Austin, Texas, its first test markets. Two hundred retailers are carrier locations for Isis, Stapleton noted, including Maverik Inc. in the c-store space. Thus far, consumers are adjusting well to contactless payment mobile wallets, he said.

"Among consumers willing to take on the product, 65 percent of them are 'following' merchants after they leave the store," Stapleton reported. "And those consumers frequent those retail locations twice as often as those who don't use mobile wallets."

Today’s event was organized by the Smart Card Alliance, a non-profit association that works to stimulate the understanding, adoption and widespread application of smart card technology. Randy Vanderhoof, executive director of the Smart Card Alliance and acting director of its EMV Migration Forum, served as moderator.