Article

Visa and the EMV Roadmap: pinning down the details

Visa's head of authentication product integration explains where ATMs figure in the U.S. implementation of contact and contactless EMV.

May 14, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

When Visa introduced a roadmap last August for EMV implementation in the U.S., deadlines for the ATM industry were noticeably absent.

On the plus side, this came as a relief to deployers who were still focused on ADA implmentation. On the minus side, it made the ATM industry the low-man-on-the-totem-pole for receiving informaton about EMV implementation.

In a recent interview with ATM Marketplace, Stephanie Ericksen, head of authentication product integration at Visa Inc., filled in a few of the roadmap gaps for ATM operators. She clarified FAQs about the Visa plan. (A companion article later this week will explore the MasterCard roadmap.)

Let's start with an overview of the Visa road map.

The first milestone [October 2012] is offering to the merchant infrastructure for upgrading to chip — dual-interface chip specifically, which means contact chip EMV as well as contactless reader functionality.

If more than 75 percent of the volume [merchants] process comes from those types of terminals — it could be a mag stripe-read transaction but coming from a dual-interface chip terminal — then those merchants can qualify for some relief from the validation requirements for PCI compliance.

The next milestone is April of 2013. That is our requirement for all acquirers and acquirer-processors to be able to pass EMV chip data — which is the dynamic cryptogram data — to be able to provide support for the dynamic data-enhanced infrastructure.

And then the next milestone is the October 2015 liability shift for counterfeit for all POS except for automated fuel pumps, which is October of 2017.

What about ATM networks?

We don't have a timeline, but we have been working with a lot of our large issuers — who also drive a lot of the main ATM real estate — on their plans for upgrading ATMs.

Not many of them are really all that focused on EMV for the ATM, although we believe that as more and more cards begin to be issued that support EMV, those issuers might upgrade their ATMs to support their own cards.

You know, a lot of the ATM industry is looking at the roadmap and asking, "Where's the ROI in this?"

That's exactly why we haven't yet introduced the liability shift for ATMs. We weren't hearing from our stakeholders in the industry that it was something that was a pressing need.

We do see that there's almost a natural incentive for those issuers who are beginning to deploy chip cards in greater numbers; they may decide to upgrade … so that they can reduce counterfeit at their own ATMs of their own cards, but beyond that at this point in time, there is not a major incentive to do so.

Do you have a target date for when all cards will change over to EMV?

We don't have a date when we anticipate all cards will be [chip]. A lot of it depends on the issuer business case; there is some added expense of issuing cards. And some of it will also depend on how quickly the merchants begin to adopt and accept EMV technology.

There will be the opportunity with the liability shift in 2015 for issuers to potentially pass some liability to merchants if they haven't upgraded their infrastructure to accept chip. So that might be a little bit of incentive both on the issuance side to issue more chip cards as well as on the merchant side to accept, but we do not have a target figure and date for 100 percent adoption.

Where are processors now in the changeover to EMV?

We've talked to almost all of the major acquirers and acquirer-processors; many of them already have implementation projects in place with our testing and certification group here at Visa. They have to certify that they can pass the data, so many of them already have test dates set up and are on track to meet that April 2013 date.

There's some confusion over whether Visa will go with chip and PIN or chip and signature; what's the plan?

Chip and signature is our preferred method for authentication, but it could also be online pin. So if a cardholder used their chip card at an ATM and it was a chip-enabled ATM, the card in the ATM would validate the EMV Cryptogram to validate that the card is not counterfeit, but the cardholder verification method would still be online PIN just as it is today.

The main reason we are advocating for chip and signature or chip and support of online PIN ... in the U.S. is more from an issuer simplicity point of view.

What we are a little bit more cautious about is how chip and pin has been deployed outside of the U.S., with chip and offline PIN, which requires the card to be able to store and authenticate the PIN offline. That just increases the card cost and increases the complexity for the issuer of issuing those cards.

Many in the industry are wondering if they need to upgrade not only for EMV, but also for NFC.

It's a common communications protocol for contactless. So if an ATM operator accepts contactless according to the EMVCo standard, then they would be able to accept the NFC mobile phone.

We would definitely encourage an ATM operator if they're upgrading their ATM infrastructure for [contact EMV] that they would also consider doing so for contactless. As more and more mobile phones are deployed in the market, consumers are going to want to use their mobile phone at an ATM to get cash access.

On the acceptance side, if an ATM processor or ATM owner is looking at deploying new technology and doing EMV contact chip, contactless is not much of an incremental add to that … the back-end data that the acquirer-processor is sending is all the same, and they're all standard in terms of the data.

Will EMV cards still carry a mag stripe?

We would still require that the cards have a mag stripe on the back for global interoperability and acceptance and merchants are also still required to accept magstripe cards for interoperability and acceptance.

For more on this topic, visit the EMV research center.

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.