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The operational impact of EMV
August 28, 2013 by atm Atom — blogger, atmatom
Let's consider for a moment how the ISO world will change when the U.S. moves to adopt EMV at the ATM.
Having successfully supported retail ATM customers on three continents with the conversion to EMV, and having navigated the EMV upgrade of our own U.K. IAD estate, we've learned several lessons along the way:
EMV adoption is both time consuming and expensive. With no associated incremental revenue, at best EMV adoption is a strategy to mitigate future fraud losses. At a cost of $600 to $3,000 or more per terminal, cost-benefit decisions will need to be made at the ISO, contract and ATM level.
The reality is that many U.S. ISOs may be unwilling or unable to make the required investment in EMV implementation.
Cooperation from issuers, processors, field service providers and manufacturers is critical. Successful EMV adoption will involve extensive coordination among a variety of constituents:
- issuers will need to ensure that cards are both compliant and non-invasive;
- processors will need to be prepared to handle a variety of software, firmware, and hardware configurations;
- field service providers will need to be prepared to tackle the likely surge in demand from ISOs for upgrade and replacement service;
- manufacturers will need to work with ISOs to develop orderly plans to address the tsunami-like surge in ATM and upgrade kit orders; and finally,
- ISOs themselves will need to develop effective rollout strategies to implement EMV across their estates — including both ISO-owned and merchant-owned equipment.
Customers must be retrained. Customers have learned over the years to "dip and retract" their magnetic stripe cards. Because most POS and ATM EMV readers incorporate a "latch" mechanism, premature card removal may cause rejected transactions, card reader wear and customer frustration.
EMV card readers must be actively maintained. Unlike magnetic stripe readers, EMV readers must be serviced on a regular basis to avoid contact wear, along with the inevitable buildup of card shavings and other debris.
Many ISOs have elected to swap out and refurbish EMV card readers on a regular basis — as often as every visit — in order to minimize rejected transactions.
Transaction rejection rates will increase. Preventative maintenance of EMV card readers should be strongly considered. Experience has shown that initial rejection rates of up to 5 percent can be expected due to card quality, environmental conditions and customer inexperience.
Longer term rejection rates should fall to 1 percent or 2 percent, still a significant increase over the current magnetic stripe technology.
Read more about EMV.
This article has been republished from the Triton blog, atmAToM, with kind permission from Triton.
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