The US payments landscape: EMV, card-not-present and mobile ecosystems

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There are a lot of moving parts in the US payments landscape with the ongoing EMV migration to chip technology, growth in mobile payments and contactless payments, and the increasing need to secure the card-not-present environment – all of which need support from and coordination with the entire payments ecosystem.

mobile and contactless payments

The US payments landscape: EMV, card-not-present and mobile ecosystems

With the expanding needs of the payments industry, we recently expanded the scope of the U.S. Payments Forum, formerly the EMV Migration Forum, to support the introduction and implementation of additional new and emerging payment technologies in the US. Under this broadened focus, new topic areas the Forum addresses include tokenisation, card-not-present transactions, point-to-point encryption, and mobile and contactless payments – writes Randy Vanderhoof, director of the U.S. Payments Forum – in this article which first appeared in the EPC Newsletter.

Moving forward with EMV in the US

The U.S. Payments Forum is made up of constituents from the entire payments ecosystem and has been the source for EMV implementation guidance since the start of the migration in 2012. Today, approximately a third of US merchants are enabled to accept chip cards, and about three quarters of consumers have at least one chip card in their wallet.

From what our chip-enabled merchants are telling us, chip-on-chip transactions are increasing at a very solid rate, and our larger enabled merchants are seeing most of their transactions come in as chip transactions. But we need to continue to support enablement of more access points, such as in-store point-of-sale terminals at mid-size merchants, ATMs, and automated fuel dispensers to meet the goal of the chip migration: removing in-store counterfeit card fraud, the largest source of fraud in the US, from the system.

To help the industry meet this goal, the Forum is continuing to address issues that arise from those parts of the ecosystem that have implemented EMV, and provide education and implementation guidance to merchant segments that have unique and/or challenging migration paths, such as the ATM, petroleum, transit and hospitality industries, as well as the mid-size merchant community.

A closer look at EMV in the petroleum environment

The unique challenges facing the retail petroleum industry in upgrading their outside pay-at-the-pump systems to EMV have been an active part of the Forum’s EMV migration discussions over the last year, particularly within our Petroleum Working Committee.

At the end of last year, American Express, Discover, Mastercard and Visa individually announced modified timelines for their respective EMV fraud liability shift policies for automated fuel dispensers in the US. The petroleum industry policy changes that were slated to take effect in October 2017 were modified to take effect in October 2020.

After these modifications were announced, we saw some misconceptions in the media that the new timeline would cause the petroleum industry to delay their migration plans. But what we are really seeing is that the petroleum industry understands that they need to ‘put the pedal to the metal’ and use this extra time to complete the hardware and software upgrades at the pump to make sure their outdoor environments are enabled to accept chip as quickly as possible to avoid fraud risk.

Over the next year, the Forum will continue to help the petroleum industry move forward with its chip migration by identifying and resolving challenges associated with implementation and conducting educational outreach programs, including to payment technology providers servicing the industry.

Addressing the card-not-present environment, mobile payments

The industry has shown a high level of focus and urgency towards securing the in-person payment channel with EMV chip payments, and it is absolutely critical that the US payments industry continues to simultaneously devote the same level of energy to work in the card-not-present channel.

With the expanded focus of the U.S. Payments Forum, we have made addressing fraud in the card-not-present environment in online and mobile channels a priority in addition to continuing to aid the migration to chip. And our cross-industry mix of payments stakeholders puts the Forum in the unique position to provide the actionable implementation guidance that the industry needs to create successful multilayer fraud reduction programs and close off these channels to fraudsters.

Two of the U.S. Payments Forum working committees, the Card-Not-Present Fraud Working Committee and Mobile and Contactless Working Committee, are heavily focused in this area and are launching projects to provide best practices and educational resources on how to help secure these channels. Some of these projects will include an analysis of card-not-present fraud trends and lessons learned around the world, and an analysis of factors that have led to successful and secure mobile wallet implementations.

In addition to the Petroleum, Card-Not-Present Fraud, and Mobile and Contactless Working Committees, the U.S. Payments Forum’s ATM, Communication and Education, and Testing and Certification Working Committees are also very active in providing guidance and resources to move the industry forward.

We have a lot of work ahead of us in supporting all of these new and emerging payments technologies, but with the support from all of the different stakeholder groups across the payments industry, we look forward to a very productive year at the U.S. Payments Forum.

This article was written by Randy Vanderhoof, director of the U.S. Payments Forum and published in the EPC Newsletter – March 2017.

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