EMV and NFC Credit Cards Coming

There is growing attention to EMV (Europay, Mastercard, Visa) ‘smart” micro-chipped credit cards here in the U.S.  Added functionality includes NFC (near field communication), both contact and contactless, like you might see at “pay at the pump” gas stations or your local coffee shop where you wave your card in front of a reader and go. Like everything related to “smart” cards, timelines for a full card association-mandated rollout in the U.S. probably will get pushed back. But over the next 6 to 18 months, expect to have to make some decisions related to how your business processes these new credit cards. If you’re thinking of changing processors, it would definitely be good to ask about EMV card processing if they expect to sign you to a multi-year contract.  The compelling benefit to this new technology is improved card data security and significant reductions in fraud loss. Despite the industry requirement to begin to accept these cards here especially in 2015, the business reality is that over 99% of domestic association-branded cards only carry a mag stripe. Additionally, processing equipment needs to be reconfigured to read these microchip cards (although they will retain a mag stripe) or be replaced entirely. So the reality of substantial costs and the logistics of such a phase-in will challenge changeover timelines. And, overriding all of this is the absolute surety that the card associations, card issuers, processors, and businesses won’t do anything that will disrupt the trillions of dollars in card processed sales.

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