Credit/Debit Cards

Majority of TMG client institutions to begin implementation of EMV in next year

credit-card-finance2A recent survey from payment processor The Members Group showed that more than 50 percent of 43 institutions polled plan to start an EMV project within the next year.

According to the survey, 11 of the financial institutions polled on their EMV plans listed 2015 as their ideal start time, while another eight institutions said they were unsure as to when they want to begin an EMV project.

Twenty-seven of surveyed institutions said they have a reissuance plan, and 22 of those said they plan to send out EMV cards on the natural reissue date. Five issuers said, however, that they would reissue upon request on a per-cardholder basis.

Most Visa and MasterCard issuers polled in the survey said they plan to issue contact-only, signature-based EMV cards for use online only. Only six card issuers plan to issue dual interface cards, which allow EMV cardholders to use tap-and-go terminals.

“A dual-interface configuration is considered the Cadillac among EMV cards and will demonstrate a credit union or bank is ahead of the market,” Brandon Kuehl, the product manager and EMV product leader at TMG, said. “However, it may require as much as double the budget to issue dual-interface EMV cards as compared to contact-only.”

Kuehl said signature cards are a “best practice” for community-based issuers because cardholders are familiar with signature authentication.

“Consumers are not used to entering a PIN when swiping their credit cards,” Kuehl said. “PIN also adds an additional layer of complexity for the issuer. When it comes to EMV issuance, TMG advises clients to start simple and add complexity in the future if necessary. The availability of PIN as an authenticator can always be added at a later date.”

None of the survey respondents indicated plans to issue EMV cards that authenticate in offline environments. While EMV cards in Europe generally allow for both online and offline transactions, cards used in the U.S. have more connectivity advantages, meaning fewer terminals in the U.S. lack the ability to communicate with authentication entities.

“For issuers without a significant number of international travelers, online-only EMV cards will be sufficient,” Kuehl said. “It’s also important to understand that offline EMV cards require a significant amount of upkeep.”

In 2010, TMG—the first card processor to launch EMV credit in the U.S.—began assisting clients make the migration to EMV and has since developed a conversion process for client institutions.

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