U.S. card issuers who delay migration to EMV face a rapidly increasing risk of loss, largely due to the impact of fraud migrating from countries where EMV deployment is more advanced. U.S. issuers should begin to make preparations now.
The U.S. is lagging ever further behind the rest of the world in EMV adoption. The cost of EMV migration is high – for the U.S. it has been estimated at between $5 and 13 billion. But the risks associated with delaying migration are growing, and without EMV deployment the U.S. payments industry could be hit with two major impacts. First, counterfeit fraud in the U.S. will rise as EMV chip cards continue to replace magstripe-only cards. Second, cross-border revenue will decline as fewer merchants in EMV-mature countries accept cards that are not EMV compliant.
Issuers can mitigate against these impacts with a combination of EMV card deployment and the global payment brands’ liability shift policies, which mainly come into effect in 2015.