The U.S. migration to the EMV secure chip-card standard has been so slow that some have compared it to the country's adoption of the metric system. But after years of delays, the mobile-wallet craze changed the rules.
“The reason [EMV adoption]’s happening now has to do with the emergence of mobile platforms as much as it has to do with security,” says Robert McMillon, vice president of global security solutions at Elavon Inc., a unit of US Bancorp. “Card schemes see EMV as a catalyst to seed the market with mobile acceptance.”
The U.S. began adopting the EMV standard two years ago when United Nations Federal Credit Union, which provides services for many international travelers, became the first financial institution to offer EMV cards to U.S. residents.
Many financial institutions have followed the credit union's lead, but they have done so slowly, and the U.S. still lags the rest of the world in EMV adoption and acceptance.
McMillon stands up for the U.S., saying EMV adoption is a slow process of converting merchant devices and consumer cards.
With more card issuers, payments processors, merchants and regional debit networks than other countries, the U.S. is a complex market, says Randy Vanderhoof, executive director at Smart Card Alliance.
“The U.S. took as long as it did because the cost of doing the swap was viewed as prohibitively expense,” he says.
The many markets that already migrated to the EMV standard had bigger fraud problems so stakeholders put more effort behind the switch, says Vanderhoof. These markets also have far fewer banks than the U.S. and could more easily coordinate their migration investment, he says.
McMillon adds, “The reality of the matter is if it hadn’t been for the emergence of mobile devices as wallets we’d still be talking about why EMV hasn’t come to us yet.”
Both merchants and analysts worry that the rapidly changing payments space will effect EMV’s relevancy in the next few years. The question seems to be: Is it worth U.S. time and money to comply with EMV?
“EMV is a step towards the next evolution in mobile payments,” says McMillon.
But the total integration to mobile payments isn’t going to happen in the next year or even three years, he says. Plus mobile payments won’t eliminate plastic cards.
“While the card is still in play, EMV provides significant benefits from a fraud and security standpoint, and it’s well worth making that move,” McMillon says.