News

CUs, community FIs rolling forward with EMV rollout plans

February 7, 2014

Payments processor The Members Group recently conducted a survey among 43 FIs and found that more than half of them would like to start an EMV project within the next 12 months. Eleven listed 2015 as their preferred start time, while eight said they were unsure about a timeline. 

Additionally, 27 of the surveyed FIs said they have a reissuance plan. Of those, 22 say they will send out EMV cards on the natural reissue date. The remaining five issuers said they would reissue cards upon request on a per-cardholder basis. 

The majority of both Visa and MasterCard issuers participating in the survey said they plan to issue contact-only, signature-based EMV cards that authorize only in an online environment.

As opposed to PIN-based EMV cards, signature cards are what TMG product manager and EMV product leader Brandon Kuehl calls a "best practice" for community-FI credit card issuers, mainly due to credit cardholder familiarity with signature authentication.

"Consumers are not used to entering a PIN when swiping their credit cards," said Kuehl. "PIN also adds an additional layer of complexity for the issuer. When it comes to EMV issuance, TMG advises clients to start simple and add complexity in the future if necessary. The availability of PIN as an authenticator can always be added at a later date."

Only six issuers plan to issue dual-interface cards, which would allow EMV cardholders use tap-and-go terminals, which are widely used in Europe, and in some major metropolitan areas of the U.S. 

"A dual-interface configuration is considered the Cadillac among EMV cards and will demonstrate a credit union or bank is ahead of the market," said Kuehl. "However, it may require as much as double the budget to issue dual-interface EMV cards as compared to contact-only."

No survey respondent reported plans to issue EMV cards that authenticate in offline environments. Whereas European EMV cards typically allow for both online and offline transactions and authorizations, stateside cards will benefit from an abundance of connectivity and a healthy telecommunications infrastructure. This means fewer terminals in the U.S. are without the ability to communicate with the necessary authenticating parties. 

"For issuers without a significant number of international travelers, online-only EMV cards will be sufficient," said Kuehl. "It's also important to understand that offline EMV cards require a significant amount of upkeep."

Read more about EMV.