Survey: Financial Institutions Seek Guidance to Navigate the EMV Evolution


Ready or not, the migration to chip-based cards using the EMV™ specifications is underway. While there is growing urgency due to a looming liability shift and increasing market pressures, many financial institutions are overwhelmed by the number of decisions that must be made – and made quickly. A recent Fiserv survey found 28 percent of financial institutions are undecided about the comprehensive nature of their migration and more than a third are unsure about their timeline for card replacement, pointing to the need for guidance and direction.

Financial institutions are looking for expertise and information regarding costs, timing and program components, according to the survey. When asked how much weight they would give to the recommendations of their EFT processor when making decisions about EMV-enabled debit cards, 68 percent of respondents said they would make decisions with some guidance from their processor and 26 percent said they would follow their processor’s recommendations. That means nearly all respondents – 94 percent – plan to make decisions with at least some guidance from their processors.

All four major card associations have announced timelines for shifting liability for specific forms of card fraud to parties that are not EMV compliant. By October 2015, Visa and MasterCard will shift the POS transaction liability for certain types of card fraud, including fraud resulting from counterfeit, and lost or stolen cards, to parties that are not EMV-compliant.

With this industry timeline in mind, financial institutions must decide how and when magnetic stripe cards will be replaced with chip-enabled cards. Fiserv found 63 percent of financial institutions plan to migrate their entire debit card portfolio to EMV chip-based cards, while just 3 percent plan to reissue EMV debit cards for select segments, such as international travelers.

Another decision facing every financial institution: Will they prioritize the migration to EMV by card type, customer segment or some other factor? Half of the financial institutions surveyed plan to reissue EMV-enabled cards as magnetic stripe cards expire or need to be replaced for another reason, while 10 percent plan a mass or accelerated reissue before the October liability shift deadline. Thirty-six percent of financial institutions report they are undecided about their plans for replacement of magnetic stripe cards.

The issue is further complicated by cards that are compromised, prompting reissuance of a large number of cards and making expiration dates a moving target. While the number of reissues in the coming year will depend on cards reissued due to compromise, financial institutions should begin replacing magnetic stripe cards sooner than later.

Interested in learning more about the migration to EMV technology? Attend the Get Ready for the EMV Fraud Liability Shift session at Fiserv Forum 2015 to understand market readiness for EMV transactions and what you should be doing to prepare your financial institution.

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