LAS VEGAS–The U.S. may look like a ripe field of opportunity to some international vendors of EMV card technology and related services as the world’s largest remaining magnetic stripe card market slowly begins a five-year conversion to chip technology.
But demand so far is sluggish, observers here at the inaugural Cartes in North America Expo & Conference suggested. The event drew about 1,500 attendees and 120 exhibitors.
Among attendees were EMV card-program specialists from the United Kingdom and Asia.
“It’s early, but we are positioning ourselves now to be ready for significant growth here within a few years,” Jeremy Gumbley, chief technical officer with United Kingdom-based CreditCall Corp., which provides a variety of EMV card-program implementation services, told PaymentsSource. CreditCall opened its first U.S. office in New York in October.
And if the experiences of UK and Canada are any indication, momentum will build toward a dizzying scramble of activity immediately before October 2015, when banks and merchants will assume liability for counterfeit card fraud that adopting EMV technology could prevent, Gumbley suggested.
“Things will definitely build toward the deadlines,” he said.
Indeed, Canada is still not completely EMV-compliant, although its liability deadlines fully took effect last year, Oliver Manahan, the vice president of emerging payments at MasterCard Worldwide who oversees chip card programs in the U.S. and Canada, told attendees in one session. Canada’s EMV-compliance deadlines originally were set for October 2010, but merchants and banks demanded a postponement (see story).
“Rumors of our completion (of EMV conversion in Canada) are greatly exaggerated,” Manahan said, noting that about 80% of bankcards are EMV-compliant, along with “about three-fourths of point-of-sale terminals and about 40% of ATMs.”
But the U.S. move to EMV is likely to accelerate other markets, including Canada, to complete their EMV conversions, as the U.S. begins to get away from relying exclusively on mag-stripe card technology, which is more vulnerable to fraud, Manahan suggested. Closing off the U.S. to mag-stripe fraud could leave any countries without EMV programs further exposed to fraud, he said.
So far, the strongest signals of EMV momentum beginning to build are coming from card and chip manufacturers, show attendees suggested, although no hard figures are available.
“We hear card manufacturers have seen a significant jump in interest in orders for chip-based cards, and we’re in discussions with a lot of merchants and also the card brands about technical plans,” Michael English, executive director of product development at Heartland Payment Systems, told attendees at a presentation about significant dates and requirements to adopt EMV.
Few, if any, major banks or merchants were visible at the event.
“It was a lot of vendors eyeing the U.S. as a potentially big, juicy new market for EMV and mobile-payment services,” Paul Coppinger, president of Scottsdale, Ariz.-based payment software developer Apriva LLC, told PaymentsSource.
Some veterans of international and U.S. payments conferences who declined to be quoted said adding Cartes in North America was unnecessary. Cartes’ big show occurs each fall in Paris, drawing nearly 20,000 attendees.
The U.S. event drew visitors from around the world, including many attendees from Asia and Latin America that came to take the temperature of emerging technologies.
“We came to see what is happening in other markets,” Adolfo Ioera, general director of Mexico-based biometric technology developer Biometria Aplicada, told PaymentsSource.
Ioera’s firm supplies technology to companies that use various biometric systems for payments authentication around the world. “We believe optical biometric authentication will someday be the global standard for government identification, and payments too,” he said.
Paris-based Cartes held its first annual expo showcasing smart card and identification technology in 1985. The organization in 2010 added a similar annual show in Asia. A second Cartes in North America will take place during the first half of 2013 in Las Vegas, the show organizers said.
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