MasterCard Proposes an Industry-Wide Group To Spur EMV Payments

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MasterCard Inc. on Monday proposed the formation of what it is calling a “cross-industry group” to ensure a smooth transition to EMV smart card payments in the United States.

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Carolyn Balfany, group head of U.S. product delivery, tells Digital Transactions News that such a group could help “all boats rise” by sharing non-proprietary information, best practices, tactics, consumer communications, and methods for moving from a payment card system based on the magnetic stripe to one that uses the so-called Europay-MasterCard-Visa chip. The group also would create a set of common terms, descriptions, and guidelines for EMV-enabled cards, terminals, and related devices.

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Balfany says MasterCard’s customers, including merchant acquirers, card issuers, processors, and merchants, have responded positively to the idea of a cross-industry group. A MasterCard press release quotes executives from the Smart Card Alliance trade group and payment processor Total System Services (TSYS) endorsing the concept of industry collaboration on EMV.

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While MasterCard has talked with a number of parties about the new group, it hasn’t yet contacted its direct network competitors about joining. But MasterCard would welcome them, according to Balfany. “Absolutely, we want them there,” she says. Spokespersons for Visa Inc., Discover Financial Services, and American Express Co. did not respond to Digital Transactions News requests for comment by late Monday afternoon.

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MasterCard expects to have more details about the group’s structure in the next few weeks. According to Balfany, MasterCard doesn’t have a pre-determined number as to how many members the panel should have, nor does it seek to impose its views about EMV on the industry. “We don’t look to dominate that forum,” she says.

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The U.S. is now the last major bastion of the magnetic stripe. Visa last summer announced plans to nudge the country toward EMV payments and MasterCard and Discover Financial Services weighed in with their own plans some months later. MasterCard and Discover said they would follow the major deadlines set by Visa’s plan, which includes a requirement that merchant processors be able to support EMV transactions by April 1, 2013 and a liability shift for some fraudulent, non-EMV transactions beginning in 2015.

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Balfany says the initial feedback to its EMV announcement included reports that the deadlines “were aggressive,” but also that companies didn’t want the networks to have separate dates. “Interestingly, now five months later … we’re not hearing much,” she says. “We’re not being approached by our customers for exemptions.”

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MasterCard has held some EMV workshops for its customers since announcing its initial plans for U.S. chip cards.