EMV CHIP-AND-PIN FOR GOVT. DEBIT CARDS

The U.S. government will replace roughly 9 million government-issued payment cards with EMV chip-and-PIN versions early next year in a push to increase awareness and use of the more secure cards. Between 5 and 6 million prepaid debit cards used for issuing government payments, including Social Security and veterans benefits, will be reissued in January 2015. Another 3 million cards issued to federal government employees will also be replaced with EMV versions through the General Services Administration’s SmartPay program.

All the cards will be set up for Chip and PIN security as a U.S. government standard under the upgrade program, rather than the Chip and Signature approach required by Visa and MasterCard for most U.S. retailers starting late next year. However, there was no indication that the new cards will actually have the less secure magnetic data stripe removed.

Finding the right answers with the latest technologies to stop these cyber thieves and taking proactive and positive steps by adopting PIN and chip technology for government-issued debit and credit cards shows the importance of protecting financial transactions. While EMV is important, it’s not a total solution to the issue of data security.

POS devices at all federal agencies that accept retail payments will also be converted to accept EMV cards on a schedule set by the U.S. Treasury Dept. No timetable was given for the federal POS conversion.

The rollouts at four of the six largest U.S. retail chains will give a boost to EMV, which despite an October 2015 deadline has seen slow uptake among retailers. Under a mandate by Visa and MasterCard, retailers who experience credit or debit card fraud after next October but haven’t upgraded their POS equipment to accept EMV cards will be liable for the loss. If the bank that issued the card hasn’t upgraded it to EMV, the bank will take the loss.

But despite that October deadline, fewer than half of retailers’ POS terminals are expected to be able to accept EMV cards by the end of 2015, and barely half of U.S. payment cards will have been upgraded by then, according to the Payments Security Task Force, a banking industry group tracking EMV uptake.

The 9 million federally issued cards are a tiny fraction of the 1 billion credit and debit cards in use in the U.S., so the overall impact of accelerated EMV conversion is likely to be small. However, the Buy Secure initiative also explicitly includes a consumer-education component. Visa said it will spend $20 million in a public service campaign, and American Express said it will launch a $10 million program to help small merchants upgrade their POS terminals.

Small merchants are less likely to know about EMV than large retail chains, which have been making implementation plans for years.

 

Posted in Best Practices for Merchants, Credit Card Security, EMV EuroPay MasterCard Visa, Payment Card Industry PCI Security Tagged with: American Express, bank, Chip and PIN, chip and signature, credit cards, data security, debit card fraud, debit cards, EMV, emv cards, EMV conversion, financial transactions, magnetic data stripe, MasterCard, Merchant's, payment cards, Payments Security, POS conversion, POS devices, POS equipment, POS terminals, retail payments, visa

With The Soaring growth in non-cash transactions, Payments industry are challenged.

Non-cash payments volumes are expected to increase by nearly 10% percent to reach 366 billion transactions in 2013, fueled by strong growth in developing markets and mobile payments.

Overall, more than half of global non-cash payment growth comes from developing countries despite them only making up one quarter of the market size at 93 billion transactions. China remains a relatively underdeveloped market for non-cash transactions but its population and growth rate suggest in certain conditions that it could soon outstrip the US and Euro-zone within the next five years.

China is one to watch over the coming years, with the report showing that if growth rates remain at the current high level, it could become the largest market for non-cash transactions within just five years. These soaring growth rates in key markets put pressure on the global payments arena to innovate to meet rapidly increasing consumer demand.

Increased use of tablets and smartphones is creating a convergence of e- and m- payments, posing new challenges for Payments Services Providers (PSPs). In 2015, m-payments are projected to grow at 60.8% while e-payments growth is forecast to decelerate to 15.9% annually over the next year, as more people use mobile devices to make payments.

This trend is adding to the pressure on PSPs to modernize their payments processing infrastructures, ideally based around a single integrated payments platform for corporate and retail payments and a central hub.

The growth of the industry coupled with the fast pace of new regulation requires flexibility from PSPs to adapt, initiatives such as real-time payments, pressure on card interchange fees and improved payments governance as examples of cascading regulation.

Posted in Best Practices for Merchants Tagged with: card, card interchange fees, consumer, e-payments, global payments, m-payments, Mobile Devices, Mobile Payments, Non-cash payments, payments platform, payments processing, Payments Services Providers, psps, real-time payments, retail payments, Smartphones, tablets, transactions