Underwriters Laboratories has been testing physical products for safety for more than 100 years, and the company has joined the payments industry at an opportune time.

The safety science company, well known for its role in testing physical products, wants to play as prominent a role in payments by helping U.S. companies certify systems as EMV ready as the country adopts EMV-chip payment cards.

UL formed its UL Transaction Security division two years ago to mark the company's progression from physical product safety to digital product safety, choosing payments as an area to test the waters, said Maarten Bron, director of innovations for UL Transaction Security.

The transformation came about after UL acquired some European companies experienced in EMV chip migrations and smart card development, Bron said. The new unit operates out of San Francisco.

"Right now, we are very active in EMV and [Payment Card Industry] security standard certifications for the card brands," Bron said. "It's not a formal UL certification mark after testing in this case, as we are doing it on behalf of other organizations."

UL's service portfolio is now "fully integrated across the payments industry and we have a lot of experience in EMV certification," Bron added.

The card networks have set an October 2015 deadline for most companies to be able to handle EMV cards, which improve security over magnetic-stripe cards. Companies that miss that deadline face a shift in fraud liability (fuel merchants have an extra two years).

"We want to help assure that EMV certification is not going to become a bottleneck in October of 2015," Bron said. "With our services, we are not just certifying a merchant, but protecting him against the EMV liability shift."

UL understands why American merchants have some reservations about EMV, a technology that has been available since 1993, and their fears that it is already outdated, Bron said.

But many other countries have already migrated to EMV, and "the U.S. has to be very careful about placing itself on an island in terms of payments technology," Bron said.

EMV deployment in the U.S. will be more complex than in other countries because of debit routing mandates and the expectation that both chip-and-PIN and chip-and-signature transactions will be in play, Bron said.

It makes sense for UL to move right into EMV certification because it represents a huge growth area in the U.S., said Avivah Litan, a vice president at Gartner Inc., a Stamford, Conn.-based market research company.

"There is a lot of physical hardware security associated with it, so it seems to be a natural transition for them," Litan said.

With EMV certification, UL should find it has strong background, Litan said.

"You have to certify that the devices are tamper-proof, that they are intact and not corrupted," she said. "They probably already certify computer chips as part of their jobs, so it would be an easier transition to move into EMV chip certification."

But despite its pedigree, the company has to prove itself in the payments industry.

"We wish there was sort of a Federal Reserve type of a mandate that would say 'thou should go to UL for certification,' but that's not the case," Bron said.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry