The blowback from the Target hacking fiasco has definitely stirred up American consumers, merchants and the credit card payment processing industry. As a result, EMV, which nobody was talking about before November, is now looming on the horizon. In fact, the two major players in credit cards, MasterCard and Visa, have joined forces to push for rapid implementation. Here’s an excerpt from their recent news release:
NEW YORK – MasterCard and Visa recently announced the formation of a new cross-industry group focused on enhancing payment system security to keep pace with the expectations of consumers, retailers and financial institutions. The group will initially focus on the adoption of EMV chip technology in the United States, in addition to addressing other security-related topics, including tokenization, point-to-point encryption and broader needs of the region.
“Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust. EMV will be the next step in these efforts, alongside enhanced security solutions for online and mobile channels.”
“One of the critical roles we play is to protect consumers and businesses against criminals and fraudsters,” said Chris McWilton, president of North American Markets, MasterCard. “Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust. EMV will be the next step in these efforts, alongside enhanced security solutions for online and mobile channels.”
From all indications the new group will include banks of all sizes, credit unions, acquirers, retailers, point-of-sale device manufacturers and industry trade groups. The formation of the group is an industry-wide recognition of the importance of enhanced security in credit and debit card transactions and online transactions and e-commerce. As I mentioned in my last post, the biggest problem faced by issuers, acquirers and merchants is trying to schedule implementation of the new hardware and software so that everyone arrives at “Implementation Day” all together. The fact that the industry is facing a $9 billion conversion cost is one of the big hurdles, but an industry-wide apathy has also slowed the changeover. Now, with Visa and MasterCard pushing hard for implementation, it seems that some feet have been put to the fire and we are starting to see some movement in the direction of better security.
Not all the experts think EMV is the answer, however. In a recent discussion group I was in, tempers flared and insults abounded as several old pros with credit card industry backgrounds pooh-poohed the idea that EMV would change anything, while a band of young Turks that see EMV as at least a step in the right direction challenged their rationale, sometimes heatedly. Which goes to say that even with a new industry-wide group pushing for implementation, not everybody’s ship is sailing in the same direction.
The bottom line here is that at least we now will have a semi-coordinated group that puts the priority on delivering meaningful solutions that benefit consumers, merchants and financial institutions of all sizes. In order to facilitate this, the MC/Visa group will focus on a broad range of security-related topics, including: 1. Advancing the migration to EMV in the United States. 2. Promoting additional security solutions like tokenization and point-to-point encryption. 3. Developing an actionable roadmap for securing all segments of the payments industry.
Those of us who are watching all this with bated breath will just have to wait and see what happens in the next year or so. And while we are watching, so are the fraudsters, and you can be sure they are already figuring out the weak spots in the proposed system. After all, they have had years of practice in Europe.
Major Players Form Cross-Industry Group to Implement EMV PIN and Chip in U.S. – ©2014 Money Movers, Inc.