According to PYMNTS.com, Visa’s latest EMV data indicates that there are 326.8 million chip cards in the hands of American consumers today, a figure that actually exceeds the total U.S. population and makes our nation by far the world’s largest market for EMV credit and debit cards.
And while tens of thousands of U.S. merchants continue to enable EMV across their payment terminals each month, according to the Chicago Tribune, MasterCard estimates that only 20 percent of ATMs today are EMV-compliant, and that only 35 percent will be EMV-enabled by October 1, the date MasterCard has set for its “EMV liability shift for ATMs.”
So, what does the October 1 “liability shift” mean for ATM owners and operators? And what should they be doing today to prepare?
CO-OP Financial Services, a provider of financial technology to credit unions based in Rancho Cucamonga, California, suggests eight things every credit union needs to know:
- Skimming at ATMs is way up. In fact, it increased by 546 percent from 2014 to 2015 alone, according to FICO data published on BusinessInsider.com. Across more than 80 nations that have already adopted the technology, EMV has very successfully helped eradicate counterfeit card fraud. You owe it to your members to provide EMV protection at the ATM as soon as you can.
- The liability shift does not mean compliance is mandatory. October 1, 2016 is simply the date when MasterCard will handle ATM card fraud liability differently. Remember that this date goes into effect for MasterCard transactions only. Visa’s liability shift – covering an additional 484 million cards – is set for October 1, 2017.
- EMV technology can extend the functionality of your ATMs. This is because the chip on the card itself can be programmed. This means that you as a credit union card issuer can offer members a broader transaction set in the future, including the ability to select their own personalized ATM settings, such as the language displayed whenever their EMV card is inserted.
- New, EMV-enabled ATMs can help transform your branches. You are making a significant investment in new EMV-compliant hardware and software, so why not make the most of it? Take a holistic view of the member experience in your branches, and ensure that your new, upgraded ATMs offer all the speed, convenience and advanced features your members expect today – in addition to EMV security. In addition, invest in a platform that can be upgraded in the future as new ATM innovations become available.
- Your processor should be involved in the transition from Day 1. While October 1 is the pivotal date for EMV compliance, most processors, including CO-OP Financial Services, will caution you not to wait until the last minute to coordinate your ATM upgrade with them. Involve your processor in the early stages of planning to avoid any bottlenecks that are likely to occur as the MasterCard liability shift approaches.
- Members value security – so educate them on it. This transition period is a great time to communicate the importance of card security to members, letting them know that you are implementing advanced technology to protect them, and advising them on what to expect at your new, upgraded ATMs.
As with POS terminals, EMV card readers at the ATM will operate a bit differently than the mag stripe technology members are accustomed to using. As you introduce your new ATMs to them, remember that a self-service platform works best when full-service assistance is there to back it up. So make sure a trained employee is on hand to help members navigate the new systems.
- Securing card data requires more than EMV. As the U.S. continues to deploy EMV technology, many experts are predicting an uptick in card-not-present fraud.
PaymentsLeader.com reports that other countries that have migrated to EMV have seen card-not-present fraud rise by as much as 300 percent, and that the U.S. can expect card-not-present fraud to at least double by 2018. Only your members know exactly when, how and where their cards have been used. So in addition to protecting them with EMV technology, empower members with a mobile app for card controls and alerts. These technologies allow cardholders to set specific limits on card usage, and are very effective at blocking fraudulent transactions.
- EMV compliance at the ATM is well worth the investment. According to BusinessInsider.com, the cost to implement EMV at a single ATM averages between $300 and $3,000. These expenses can add up quickly, and may prompt some ATM owners to put off the upgrade. Remember that your migration to EMV across all products and channels brings with it a multitude of benefits for your credit union and members. It is one of the most important investments you can make in your brand and in the member experience you provide now and in the future.