TMG Advises Card Issuers to Perform Cost-Benefit Analysis Before Implementing EMV

(Des Moines, Iowa – Nov. 1, 2012) – In a new white paper by The Members Group (TMG), two payments experts explain the liability-shift deadlines proposed by the major card networks are not EMV mandates.

“With liability shift timelines in place, financial institutions may feel compelled to implement EMV immediately,” write co-authors Matt Flynn, TMG director of client relations, and Brandon Kuehl, product development architect. “However, it’s important to understand these timelines are suggestions and are not mandated.”

Rather than rely on the liability-shift deadlines for motivation to implement EMV, the paper argues, issuers should look at their own unique portfolios to determine the best time to make the switch.

The authors describe several cost-benefit considerations credit unions and community bank issuers should weigh as they develop their own plans for migrating magnetic-stripe cards to EMV chip cards. Those considerations include:

  • Current and Future Fraud Losses – Compare anticipated fraud losses to the investment required by an EMV upgrade, understanding U.S. fraud is on      the rise.
  • Cardholder  Convenience – Evaluate whether EMV is key to maintaining top-of-wallet positioning, among internationally traveling cardholders.
  • Interchange – Understand how EMV chip cards may improve acceptance internationally, potentially increasing revenue from increased transactions.
  • Portfolio Segmentation – Determine which sections of your portfolio are positioned best for EMV.

Flynn and Kuehl then take readers through the decision between chip-and-signature or chip-and-PIN formats, adding that a hybrid of the two formats is possible: “Today, a given plastic can have both chip-and-signature and chip-and-PIN functionality. In this set up, the card’s chip communicates with the merchant’s terminal to determine which verification method to use. As well, issuers that migrate to chip-and-signature cards now can also add chip-and-PIN functionality in the future.”

The paper also discusses why the major payment networks are pushing the nation to move toward EMV and how the existence of the Durbin Amendment is preventing EMV for debit cards from becoming a reality today.

To learn more, download “The EMV Roadmap: Designing Your Financial Institution’s Plan” for free at

About TMG
The Members Group (TMG) is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit

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