Rising card fraud will drive issuers to migrate 70% of credit cards in the U.S. to EMV by October of 2015, along with 41% of debit cards, a new report released today by Aite Group predicts. Credit card fraud rates have double since 2007, an debit card fraud is also rising sharply, according to the report.
The beginning of October 2015 is an when Visa will implement a liability shift or card-present transactions.
The growing fraud threat, along with other factors such as the difficulty of using magnetic stripe cards overseas, will spur issuers to hasten the issuance of EMV-enabled cards in the fourth quarter of this year, according to the report. Out of the 18 issuers interviewed for the report, eight said that they will start issuing EMV cards to the general public by the end of the first quarter of next year.
[For More On the Barriers That Remain to EMV Adoption: EMV Adoption in U.S. Faces Significant Hurdles]
Most of the issuers interviewed are going to roll out contact-chip cards, rather than dual-interface cards with contactless capabilities, which could be a precursor to mobile contactless payments. The issuers don’t expect merchants’ payments terminals to be ready to accept contactless payments in time for the liability shift, according to the report.
The report details the past experiences of five other countries (the U.K., Australia, Mexico, Brazil and Canada) in migrating to EMV, and offers insights for banks on how to prepare for EMV migration.
“Issuers, based on lessons learned from other countries, should consider issues like fraud migration paths and how to counter them, as well as how to educate the consumer and merchant alike on chip cards,” Julie Conroy, Aite’s research director for retail banking, said in a statement. “They should also consider using third-party expertise, already deployed in the EMV migration of other countries, to streamline the implementation process.”
Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio