On January 30, 2012, MasterCard followed Visa’s lead and outlined their U.S. Roadmap to Enable Next Generation of Electronic Payments, which include EMV acceptance (informational website).
According to their release, the elements to MasterCard’s roadmap are:
- EMV – Solidifying EMV as the foundation of the next generation of payments
- Immediate focus on acquirer infrastructure – Working with acquirers to ensure infrastructure readiness by April 2013
- Encouraging greater security and cardholder verification – Providing consumers with greater control and to reduce fraudulent transactions
- Provide benefits for merchant terminalization – Providing true financial benefits for merchants as they implement EMV-compatible terminals
- Cover all channels – Addressing all touch points where consumers will interact with MasterCard, including ATMs, the physical point-of-sale, online and mobile commerce
- Commitment to leadership and collaboration – Fostering industry collaboration to deliver the next generation of payments into the U.S. marketplace
Further, MasterCard intends to “support current industry timelines in an effort to minimize disruption and to maximize investments across the payments ecosystem”, effectively backing the timelines Visa released in their 8/2011 announcement:
- October 1, 2012: if > 75% of retailer’s payment transactions occur on dual interface EMV-capable terminals, Visa removes requirement for annual PCI-DSS recertification.
- April 1, 2013: Payment processors are required to begin accepting EMV transactions.
- POS: October 1, 2015: liability shift for any in-store POS fraudulent transactions on non-EMV compatible terminals
- Forecourt: October 1, 2017: liability shift for fraudulent transactions on non-EMV compatible terminals
While the 2015 and 2017 dates are referred to as “liability shifts” and not “mandates”, retailers should carefully evaluate the costs and benefits to determine significant the liability shift will be to their business.
Woven into both Visa and MasterCard’s announcements was the importance mobile payments will play in tomorrow’s payment infrastructure. Viewed as EMV chip transactions on the existing credit card “rails”, NFC-based payments providers such as ISIS (joint venture between Verizon, T-Mobile, and AT&T) and Google will continue to gain adoption, as more NFC-capable phones come available on the market.
What is still to be determined is how the adoption of EMV will impact interchange fees. Despite claims that the new technology will decrease fraud associated with credit card purchases, Visa has stated they have no intentions of reducing interchange fees to retailers. This may well be the next battle to brew on Capitol Hill.
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