Despite regulatory and legal uncertainties that could affect the U.S. EMV chip-card migration, MasterCard Inc. is telling its acquiring banks and merchants that it intends to stick to its October 2015 deadline.
The card networks will impose a shift in fraud liability on most merchants who do not accept EMV cards by that time. Fuel merchants have until October 2017.
Because of various concerns in the merchant community, as well as one legal setback, many have speculated that the card brands would extend their timelines. Some have even suggested speeding up the U.S. migration to EMV cards in the wake of the massive data breach at Target Corp. EMV cards are harder to counterfeit than magnetic-stripe cards are.
Though the major card networks set the same target date for EMV adoption, they issued their guidance individually. This raises the possibility that the card networks could separately choose to alter their own timelines for merchants.
MasterCard will not delay its target date, as doing so would present a larger window for fraudsters to target the U.S., Chris McWilton, MasterCard's president of North American markets, states in a Jan. 8 letter to MasterCard customers.
Visa Inc. did not provide comment by deadline regarding its stance on whether to change the EMV timelines.
"In the wake of the recent reported merchant data breach, chip technology has gained even greater interest and rightfully so," McWilton states. "MasterCard continues to believe that now is the time to migrate to EMV in the U.S."
The EMV migration represents an upgrade that "will drive both innovation and security for all of us and, more importantly, consumers and cardholders," McWilton adds.
MasterCard's timeline provides incentives to migrate to EMV, but does not represent a mandate, McWilton says. Merchants can choose to accept only magnetic-stripe cards if they are comfortable with the security implications.
MasterCard also encourages merchants and acquirers to keep moving forward with EMV planning, despite uncertainty over the routing process on EMV debit cards. A July court ruling forced the Federal Reserve Board and the payments industry to reconsider its approach to EMV debit-card routing.
"None of us can ignore the possibility of future changes to U.S. debit routing requirements," McWilton says. "While the landscape may look differently in months or years, we cannot stop progress because there is too much at stake for all of our customers."
McWilton also acknowledges that the card-present security that EMV provides "is not the only action we need collaboratively take." MasterCard remains committed to security in all payment channels, he says.