There has been a lot of talk around October being the “anniversary of the U.S. chip migration” as it marks a year since the in-store fraud liability policy changes went into effect in the U.S.
But we are in the midst of a large, complex migration that cannot be summarized by a single year’s activity. It’s important for the payments industry to be aware of, and prepare for these important steps of this bigger journey towards full enablement of chip technology to take card-present counterfeit card fraud out of the system.
Some of the key dates on the horizon include Mastercard’s October 21, 2016 ATM fraud liability policy change, and next year additional changes for ATMs and the petroleum industry are slated to take effect in October 2017.
In terms of progress today, industry estimates agree that approximately a third of U.S. merchants are enabled to accept chip cards, and about three quarters of consumers have at least one chip card in their wallet. From what our chip-enabled merchant members are telling us, chip-on-chip transactions are increasing at a very solid rate and our larger enabled merchants are seeing most of their transactions come in as chip transactions.
As merchant enablement continues to increase through the rest of this year and into next year, we can expect to see chip-on-chip transactions become a bigger proportion of overall transactions. As more consumers use the chip cards they have received from their financial institutions at payment acceptance points and ATM machines enabled for EMV, fewer opportunities for counterfeit card fraud, the largest source of in-store card fraud in the U.S., will remain.
To get us there, we will continue to work together as an industry to identify pain points in the migration and address issues to help move merchant enablement forward and help them reach their goal of chip card acceptance to avoid counterfeit fraud risk more quickly.
Some of the ways that stakeholders from across the ecosystem have come together to accomplish this is through providing resources on options to improve the speed of chip card transactions, the best practices for managing chargebacks, and changes to the minimum requirements for merchants impacted by the faster EMV specifications that were announced by the payments brands.
As we move through more key dates this month and in 2017, there will be a strong focus on the ATM migration. While we know that larger banks are on track, we are educating smaller banks, credit unions and independent owners in the ATM industry on the steps and best practices for implementation. And probably most critical: we are identifying the needs of the merchant segments that have not yet migrated or have unique and/or complex migrations – petroleum, hospitality, grocery and transportation industries – and provide them with implementation guidance to make the process more efficient.
I have long been a believer that it takes cooperation and coordination on the parts of every member of our payments ecosystem to move the migration forward. I am encouraged by how much I have seen this happen, and encourage the industry to continue this as we work through this journey towards full enablement together.