Even two years ago, when the first U.S. financial institution committed to issuing secure chip cards, vendors said no one was lined up to follow. But times have quickly changed.

Gemalto NV now sees such potential in issuing chip cards that use the EMV standard that it announced Feb. 9 an instant-issuance service in the U.S. The standard is more common in other countries, where it is called chip-and-PIN.

Gemalto's news comes on the heels of Visa Inc.'s Feb. 6 announcement of a service that helps issuers offer EMV cards without the drawn-out and costly technology investments that would normally be required (see story).

Visa and MasterCard Inc. also have set deadlines for merchant acceptance of EMV chip cards (see story).

"Both issuing banks and retailers have to transition to EMV for the shift to be successful," says Wedbush analyst Gil B. Luria.

Gemalto's Dexxis EMV instant-issuance product encodes chip cards and writes information to the cards' magnetic stripes.

Instant issuance is an important piece to EMV adoption, payments consultant Philip Philliou says in an email.

"I am in Brazil this week working for a very large retailer," he says. "Like the U.S., Brazil is migrating to EMV. It's evolutionary and takes time. As a tool to reduce fraud, it is imperative."

However, many players have been promoting instant issuance, and the technology has yet to catch on even with mag-stripe cards, says Celent senior analyst Zilvinas Bareisis

"Of course, there are benefits of increased customer satisfaction, and even reduced fraud, but the biggest advantage I see here is the opportunity to educate the customer," Bareisis says.

Indeed, for at least three years, Gemalto has been promoting EMV cards among U.S. issuers.

"Anything that involves chips and chip security is going to be a hot business over the next few years," says Brian Riley, a research director in the bank cards practice at TowerGroup. "Gemalto has really been pushing this U.S. adoption for a few years, I think their pay day is about here."

In 2010, United Nations Federal Credit Union made Gemalto-produced chip and PIN cards available to its members (see story).

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