EMV: On Your Mark, Get Set, Start Planning!

Credit unions start taking the first steps toward implementation.




Recent announcements from Visa and MasterCard have set the stage for the U.S. implementation of EMV (Europay, Mastercard, Visa) chip cards, driving toward widespread EMV adoption by October 1, 2015.

Between now and then all stakeholders in the payments value chain – including credit unions - will need to roll up their sleeves and face new challenges to reach that goal. That means not only upgrading physical infrastructure, but also collaborating with one another to ensure a smooth transition and seamless cardholder experience. The good news is that the reward at the end will be great. When the finish line is crossed, issuers and cardholders will both benefit from lower instances of fraud. Plus, as an added benefit, the groundwork for the adoption of contactless NFC (Near-Field Communications) and mobile payment systems will also be in place.

Implementation Decisions
Most agree there is not a pressing need to mass reissue. So take this time to build a plan and understand the dynamics of EMV. Roadmaps may be very different between credit unions. There is no single right path. Evaluate key questions such as what functionality and authentication the physical card should offer.

Product Segmentation
Credit cards are the most likely candidates for initial focus, given higher fraud rates and greater use outside the country. When there’s an immediate need among a specific member segment like international travelers, some credit union will introduce EMV Prepaid Travel cards, which can be issued in as little as three weeks and are cost-effective.

Next, credit unions will need to decide whether to introduce contact cards, contactless, or an option with both functionalities. It should also be noted that magnetic stripe will still be prevalent for a while, and EMV plastics will also be enabled with this option due to merchant acceptance at the point-of-sale.

Authentication Method
Credit and debit EMV cards can be authorized with a PIN or with a signature.  The majority of merchant terminals will support both, so it will be up to the institution to decide which authentication method to offer. On one hand, preserving signature verification avoids the member learning curve (especially with credit cards) that will be necessary if PIN becomes the standard in the U.S.  Conversely, PIN transactions are generally perceived to be more secure, particularly among merchants.

Next Steps
Deciding between the various options will require not only concrete research but also making educated assumptions regarding how the market will evolve. By following these three steps, credit unions will successfully cross the EMV finish line ready to match members’ needs stride-for-stride.

1. Define the roadmap and strategy that’s right for the credit union and its members.

2. Understand and navigate critical choices, including product segmentation, card functionality, and card authorization. Consider budget implications as well as benefits in reduced fraud.

3. Develop a migration plan that minimizes expenses, maximizes savings, and ensures member satisfaction.


To learn more about EMV and the future of payments technologies, visit CSCU’s EMV Essentials.

CSCU is the credit union industry’s advocate, partner and leader in total payment solutions. Created by and for credit unions, CSCU is driven by the same principles that guide the industry. CSCU’s services and offerings are focused on driving the growth and success of our 2,700 member credit unions.




Sept. 10, 2012



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