Fraudsters continue to target the U.S. market by manipulating card information and the card-insertion process via skimmers. Using these best practices, bank and credit unions can prevent fraud and EMV fallback transactions.
Consumers have been frustrated by the EMV process at the POS because they are unfamiliar with the way the transaction works and it is not universal at all POS terminals. The result is confusion and longer transaction times as both merchants and cardholders wade their way through the learning process. While cardholders may be disappointed at the length of time an EMV transaction takes, the process will speed up once they are more familiar with the steps and know exactly when it should be used. The key to avoiding these problems for a smoother ATM transition is to create a unified experience. It is up to FIs and their ATM networks and suppliers to make this happen.
EMV has put a heavy burden on financial institutions. New chip-ready cards have increased the costs of running credit and debit programs not to mention the headaches of slow turnaround on the development and issuing of the new plastic.
What many banks and credit unions may not realize is the additional risks they may be taking by waiting to upgrade – including a significant increase in monetary risk.
In today’s high-tech society, personal security has become a real concern for consumers. The rise of identity theft and financial fraud has begun to regularly make the news – from small financial institution (FI) debit/PIN hacks to major retailer breaches such as Target and Neiman Marcus. A recent study from LexisNexis reports annual fraud reached $32 billion in 2014, a 38 percent increase from 2013.
EMV migration is going to be an expensive endeavor for every player in the payments ecosystem — processors, card Issuers (banks and credit unions), ATM operators and merchants.
Card issuers must license application IDs and produce new plastics that will now be two to three times more expensive than mag stripe card costs. ATMs will need new hardware and software. And on top of all of this, consumers will need to be educated on the new process.