The EMV Migration Committee held its inaugural meeting via conference call on Thurs., April 12, to discuss first steps toward a coordinated industry response to MasterCard and Visa mandates for EMV migration.
The brainchild of Mark Smith, vice president of financial services at Kahuna ATM Solutions and Lyle Elias of the International Payments Forum, the committee was formed as a means to bring clarity and conformity to the industry transition to EMV. Both MasterCard and Visa mandated a changeover in recent months, with each publishing a "roadmap" to implementation.
MasterCard Inc. issued a bulletin in September, 2011 giving Apr. 19, 2013 as a deadline for a shift of fraud liability to ATM acquirers to accept chip-card payments in the U.S.
Visa has not set a deadline for ATM compliance but rather has focused on POS devices which must accept chip cards by October 2015 to avoid a shift of liability to the merchant's acquirer.
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ATMIA CEO and committee chairperson Mike Lee acknowledged that the deadline was an "aggressive" one, and he outlined a number of issues that must be resolved in order for the industry to begin working toward EMV migration with a measure of confidence:
- What exactly is the mandate from MasterCard and Visa?
- Which standard will apply — "Chip and Signature" or "Chip and PIN"?
- What will the costs of migration be?
- What is the cost-to-benefit business case to motivate migration by the ATM industry?
- What about ATM infrastructure that cannot be upgraded to EMV and will have to be replaced?
- What are the delivery timeframes for manufacturers?
- Will processors and ATM deployers be required to support EMV standards currently in use outside the U.S.?
- What are the network processors' plans for EMV migration?
- Have MasterCard and Visa mandated that card issuers provide EMV cards to consumers?
- What role will PCI play in an EMV environment?
- How can we synchronize migration strategies across the industry to save costs and avoid duplication?
- In the absence of a single coordinating entity, how can we establish ground rules for an orderly migration to EMV?
Bill Dunn, vice president of sales and marketing at Hantle, suggested the industry should do a readiness survey to determine the physical impact of the EMV changeover. "A lot of equipment can't be upgraded and it's going to have to be swapped," he said. "We have to build our fact base: '"X" percent of the industry has to be swapped, manufacturers, processors will be in this position and may or may not be ready to support this.'"
Lyle Elias of the International Payments forum said the committee should set two goals: one, create a best practices document that would serve the industry as a source for reliable information; and two, solicit input from industry members who were actively involved in migrations to EMV in Canada and Europe.
"I think there's so many different issues that all surround the same main issue, which is the migration itself, Elias said. "I'd like to recommend that we look at these two aspects where we could actually make a difference — I don't think we're going to make much traction with visa and mc, whether their roadmaps are realistic or not."
Committee members said that MasterCard would be unlikely to issue waivers for its April 19, 2013 deadline and would probably not be open to postponement of the liability shift deadline.
The one-hour conference ended with the creation of a list of next steps that included, among other tasks:
- Conduct an EMV industry readiness survey to determine the challenges, costs and capabilities associated with EMV migration
- Seek clarification directly from the card associations as to the exact specifications and requirements of the U.S. EMV mandates
- Arrange a series of webinars on the topic of EMV migration, beginning with clarifying the mandate
- Establish an EMV portal at www.atmia.com
"We will step up to the plate in terms of providing education and best practices to our members," said Lee. "We will always be willing to work with other industry bodies because there simply isn't time to do it any other way. We need to collaborate and work closely together because the deadline isn't very far away and the issues are very complex."
For more on this topic, visit our EMV research center.