EMV Adoption: Don’t Go It Alone
I’ve been blogging about the forthcoming EMV adoption in the US. EMV is the global standard for credit and debit card payments that leverages dynamic authentication credentials…

I’ve been blogging about the forthcoming EMV adoption in the US. EMV is the global standard for credit and debit card payments that leverages dynamic authentication credentials. The embedded microprocessor chips in EMV cards authenticate each transaction uniquely, making the process nearly invulnerable to fraudsters. Most in the payments industry agree that the switch is necessary to improve security. But it’s not without its challenges.
Distributing new chip cards and educating consumers is one piece of the transition for issuers. Another is making needed upgrades to other parts of the payments infrastructure. This includes putting new fraud prevention measures in place to prepare for the expected uptick in card-not-present (CNP) fraud, as I discuss in my last post.
There’s a tremendous opportunity for US issuers to benefit from lessons learned in other markets that have already undergone EMV transition. For 20 years, FICO has cultivated a consortium of lenders sharing their collective fraud knowledge and experiences with industry peers across geographic regions. Consortium-based learnings will help US issuers navigate the transition to EMV, as well as the changes in fraud likely to follow.
There is no need to reinvent the wheel here and, frankly, there is no time for that. Chip cards are already being rolled out to US customers. Visa has mandated that processors be EMV-ready by April 1, 2013. On October 1, 2012, the Fed’s new Fraud Allowance rule goes into effect, providing cash back to issuers with effective fraud prevention measures in place. Leveraging existing knowledge on EMV adoption is a critical way to stay one step ahead.
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