Efforts to reduce credit card fraud through the greater adoption of EMV cards needs help
As I had highlighted in my earlier post here, upgraded credit cards or EMV credit cards would reduce credit card fraud greatly. However, the adoption for EMV cards has been extremely slow and the target deadlines are totally being missed. The current deadlines will have to be postponed and strong incentives need to be offered to merchants.
London-based senior analyst Zilvinas Bareisis, notes that Visa Inc started the EMV roll out in August 2011 and since then only about 0.5% of total credit cards have been EMV cards. That’s about 1 millions credit cards out of a total card base of 660 million cards as cited by Visa in its report.
Merchants may get Interchange Relief
The cost involved in upgrading about 8 million credit card accepting merchant locations in the U.S. has merchants upset and unwilling to participate. The very low fraud rates of about 0.085% of transaction volume in 2012 are to blame for the low and slow adoption of EMV cards. The cost of training merchant employees are also a factor in the slow down. Some analysts believe that the cost factor for merchants is the main, and perhaps the only, reason for the slow down. Therefore, incentives like interchange rate relief for EMV transactions, and also stopping the use of signatures and using PINs instead for better security would go a long way in helping and convincing merchants to adopt EMV standards.
This article by Digital Transactions takes a more in-depth look into this issue.
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