Joe Santana, Senior EMV Acquiring Consultant at FIME
EMV® chip has had a staggering impact on the payments ecosystem since its introduction roughly twenty years ago.
With migration progressing at different paces globally and the way we transact continuing to evolve – as wearables and smartphones shake up the ecosystem even more – EMV sits at the centre of the payments world.
But why is EMV so important, what do stakeholders need to know and what are the next steps? We chatted to FIME’s EMV expert Joe Santana, to give us a global overview.
Q: Why was EMV introduced?
Joe: EMV chip-based technology was initially introduced to tackle fraud and increase the security of transactions while creating a globally interoperable payment framework. It did this through the technical body, EMVCo, which publishes card and terminal specifications that define how transactions should be processed and managed by each stakeholder in the payments ecosystem. Today, the body continues to support an advancing range of payment methods, technologies and acceptance environments.
Building on this framework, each payments system also specified its unique testing requirements to enable stakeholders to process EMV transactions according to their business rules. There was also a desire to implement additional, more secure cardholder verification methods (CVM). Magnetic stripe-only cards relied largely on signatures for validation, but easy manipulation played into the hands of fraudsters. EMV brings CVM options that each payment system can decide to implement, such as encrypted PIN, cryptography, online and offline payment authentication to ensure that the transaction and the cardholder are legitimate.
Q: What impact has it had on the payments ecosystem?
Joe: Firstly, EMV has been a huge catalyst in reducing payment fraud. Besides this, though, a few things really stand out for me:
- Offline transaction management – The development of a sophisticated, secure method for authenticating transactions offline was an important advancement for the payments ecosystem. It brings big benefits to areas with less connection and reduces communication costs.
- Multi-application cards – This is an area that is being tapped into now, enabling credit and debit, for example, to be managed on one card. Flexibility for consumers, less plastic in wallets and less issuance fees for banks.
- New business opportunities – EMV has created a sophisticated payment industry and is enabling other business models. Tradespeople and market retailers can now accept secure payments with mPOS, and EMV is the foundation for mobile contactless and wearable payments, in addition to secure smart ticketing.
Q: What is the status of EMV migration globally?
Joe: So, EMV has been around for a number of years but the process is ongoing. Even mature markets like Europe are not 100% migrated. Good progress is being made in Asia-Pacific and the U.S. is extremely interesting, as the scale and complexity of its migration has brought about initiatives like QuickChip and M/Chip Fast which help to reduce transaction times and assist some issuers by reducing certification testing. With this in place, I observed a lot of demand from banks for testing and training to help them ensure everything is working correctly prior to launch.
We’re also seeing a strong trend from domestic payment networks to support EMV transactions within the country or region that they serve. This is something I think we’re going to see more and more in the coming years.
Q: What should banks take into consideration when assessing EMV or contactless roll out?
Joe: EMV is a constant process, with a big impact on infrastructure and management. New technology, processes, departments, teams. The amount of information, skills and expertise banks need to get to market and stay there can be overwhelming. Even the biggest processors don’t have all of this knowledge inhouse!
Training, knowledge and testing with the right partner keeps players ahead of the latest specifications and updates. I can assure you that this expertise helps them to ensure an efficient route to market.
Q: What challenges remain for the payments ecosystem?
Joe: Contactless is still a challenge, as each payment system has its own contactless specification which has caused some headaches for the payment industry. Going forward, with EMVCo’s help to clearly define universal specifications and certification processes, the ecosystem should have an approval process for contactless kernels that is streamlined and more aligned to the certification of contact kernels.
Building on this, the move to mobile will also continue to shake up the payments ecosystem. You can see that banks are increasingly expected to offer mobile payments to their customers and the infrastructure is working hard to ensure seamless and secure payments.
Q: What expertise does FIME have in this space?
Joe: As EMV continues to evolve and migration progresses globally, issuers, acquirers, integrators, processors, schemes, manufacturers and certification bodies all have a lot to consider. We work with the whole ecosystem, right from the start of projects to take away the pain with training, consultancy, tools and certification services.
We’ve been working in this space for over 20 years, are involved in EMVCo to support the development of the EMV Chip Specifications and therefore have the experience and expertise to get projects completed quickly and successfully. Our tailored training helps clients make sense of the constantly shifting payments landscape. By providing standard and customized training events and workshops, we equip attendees with the knowledge and skills needed to guarantee a successful project outcome.
*EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo.