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Despite hiccups and hitches along the way, the conversion of the massive and highly fragmented U.S. payment card industry from magnetic-stripe credit and debit cards to ones bearing an EMV chip appears to be moving apace.
The latest data from MasterCard Inc. finds the number of merchants accepting chip cards increased to 1.4 million as of April 30. That’s a 17% increase from the 1.2 million MasterCard reported in March. A Visa Inc. update in April put the number at 1 million merchant locations as of March 31.
MasterCard also says 68% of all U.S.-issued MasterCard-branded consumer credit cards have an EMV chip, an uptick from the 67% the card brand reported in its previous report. MasterCard did not provide data on EMV debit cards.
The growth in cards, though modest, is encouraging, says Chiro Aikat, MasterCard senior vice president of product delivery for EMV, via email to Digital Transactions News. “The number should continue to grow until we hopefully reach the 98% of chip card penetration projected by the Payment Security Task Force for the end of year 2017,” Aikat says.
MasterCard also announced it is working with other payment networks, acquirers, processors on a standard to speed checkout times with EMV cards based on its M/Chip Fast technology. Developing such a standard would require cooperation within the payments industry. “Right now there are discussions within the EMV Migration Forum amongst the payment brands, processors and merchants to better understand each of the brands’ specifications for faster chip transactions and how they might impact merchants and cardholders,” says an EMV Migration Forum spokesperson.
That technology prioritizes some security parts of an EMV transaction, Aikat says. “Cardholders can expect to experience speeds closer to the familiar magnetic-stripe transactions with the added security of EMV,” he says. “It builds on the principles of contactless or tap-and-go technology, helping to speed EMV transactions and shoppers through checkout lines.” Visa has a similar program, called Quick Chip for EMV.
Both programs launched about six months following the Oct. 1, 2015, liability shift date. Aikat says the M/Chip Fast announcement stems from feedback from consumers and merchants. “As with any new large-scale technology, this feedback can lead to changes.”
The use of EMV chip cards also appears to be having an effect on counterfeit card fraud. MasterCard says such fraud at a group of large chip-enabled U.S. merchants decreased 39% in terms of basis points in January compared to January 2015. Overall, counterfeit card fraud at these merchants decreased 27% in terms of overall U.S. dollar volume in January from January 2015.
