There's plenty of criticism of the U.S. chip card migration, including its pace, the pressure on merchants to upgrade and the lingering confusion over how to use the cards.
But Visa painted a more bullish picture of the migration during its April 21st earnings call, with CEO Charles Scharf reporting 265 million chips cards have been issued in the first six months after the Oct. 1, 2015 liability shift.
"That makes the U.S. the largest chip card market in the world," Scharf said during a conference to discuss earnings.
About 27% of U.S. merchants, or about one million businesses, have already migrated. At this pace, that figure will reach 50% by the end of Visa's fiscal year 2016 in September.
These numbers sound impressive, but that doesn’t mean EMV has been a success thus far in the U.S., according to Richard Crone, a payments consultant.
"The migration is not going well. It's slow, it's hampered and it's bumpy," Crone said. "Visa and MasterCard and other supporters will try to make it sound good because EMV is one of their key cornerstones in their competitive position against the disruptive moves from mobile payments."
Visa is already making adjustments to address the pain points consumers and merchants have encountered in the shift to EMV cards.
The card network's Quick Chip system is designed to reduce the steps in the EMV authorization process so transactions complete faster from the consumer's perspective. As a result, shoppers can leave their cards in the terminal for just two seconds instead of the current average of 10.
"These enhancements require a simple update, and Quick Chip is free of charge to processors and acquiring banks," Scharf said, saying the product addresses concerns in the U.S., and as such Quick Chip is not intended for international use, nor is it considered a revenue generating product.
Visa also reported positive results for digital initiatives such as Visa Checkout and its new open development strategy. The network reported 12 million users in 16 countries for Visa Checkout, and Scharf said Visa Checkout will be available in six additional markets by the end of the year.
Additionally, the network's open development platform has already produced results, Scharf said. In February, Visa made its application program interfaces and software development kits available to hundreds of third party developers to expedite innovation. "We've had strong interest in this," Scharf said.
For example, a non-U.S. client recently used the tools to build technology to give consumers control over their card accounts via a mobile app, remotely turning cards on and off.
"Working with our team and the APIs, they designed and built and launched a working prototype in three days. Before, this would have taken months," Scharf said.
For the quarter ending March 31, Visa reported net income increased 10% to $1.71 billion from $1.55 billion the prior year. Earnings per share were $0.71, up from $0.63% the prior year. The average estimate of 32 Bloomberg-surveyed analysts was $0.67% per share.
Visa reported strong consumer spending, particularly in the U.S., though the card network noted economic weakness in China, Brazil and oil-based economies would challenge its outlook for the rest of the year. The weakness in China has not dampened Visa's hopes to expand into the country, and Scharf mentioned Visa has signed partnerships with local companies to collaborate on security, financial inclusion and tourism promotion.
Additionally, Visa's acquisition of Visa Europe could be delayed because of a restructuring of terms. Scharf attributed the change to discussions with European regulators, but did not provide more details.