Guest Analysis: EMV – Learning from Global Experience

Jeremy Gumbley
July 15, 2013 – It is clear from the staggered rates of EMV adoption across the globe that there are many factors at play in the successful migration to this standard. In a bid to increase interoperability between global payment systems and reduce card fraud, the shift is revolutionizing the entire payments landscape. Merchants, processors and issuers must all tackle a range of technological changes to support the move away from the traditional mag-stripe to EMV Chip-card technology. The scale of this project coupled with the size and complexity of the US payments market means that it is   the last major region to convert to EMV. However, with migration plans in place, the US is in a strong position. The ability to deploy tried and tested approaches from other markets means this region can now look forward to a fast and successful migration.

The first major opportunity on which the US can capitalize is the wealth of global knowledge around EMV migration best practice. Working with established experts and providers who have driven EMV transitions in other markets will allow the US to harness expertise in the exacting EMV standards and requirements. This will allow the market to bypass the lengthy education campaign that has been necessary in other countries, bridging the ‘knowledge gap’ quickly to save time and resources. This could allow for a swifter and more cost-effective migration than has been possible in other regions.

EMV migration brings with it a range of technological challenges. The shift affects the entire payments landscape – organizations must modify or replace every payment terminal and banks must reissue credit and debit cards. However, the range of solutions already available means that the US need not start from scratch in tackling the technical transition. Organizations in this country can work with third parties to easily integrate EMV technology with their own solutions, streamlining their route to market and bypassing the need for expensive in-house technology development.

Organizations in other regions have struggled with the time-consuming testing and certification process before EMV terminals can be deployed. This includes EMV Level 1 and 2 testing at the card reader or PIN pad, in addition to end-to-end testing with each payment processor. Organizations can fast track this process, making use of pre-certified solutions to effectively outsource the certification process. This will support on-time delivery of the project, reducing the risk of testing failures and keeping on budget.

Finally, with experience comes evolution – manufacturers and integrators in other markets have already begun exploring ways in which they can reduce the costs of EMV migration. The Cloud is emerging as a viable alternative to the existing model, which would place the EMV Kernel in a cloud-based server and connect to the terminal via a web service. As the US migrates its payments infrastructure to Chip-card technology, it has the potential to pioneer widespread adoption of this model and lower the cost of the vast EMV migration project.

Global co-ordination is a necessity if EMV is to achieve its ultimate aim of stamping out payment fraud. This is true not only for the prevention of fraud migration, but also in the context of knowledge sharing. The US is in a uniquely advantageous position to capitalize on the experience of other markets to deliver a best practice EMV migration path. This will allow the market to look past the administrative burden of the transition to realize real value for its payments infrastructure.

[spacer height=3] [divide] [spacer height=3] Jeremy Gumbley is CTO of CreditCall