For some time, this blog has been talking about the growing conversation in the payment industry that surrounds EMV cards. The chip-enabled plastic is in use across the ocean but has yet to take root in the U.S. With the deadline for adoption from MasterCard and Visa set for October 2015, that change is going to happen.
However, what will this kind of massive update cost and are all companies really on board?
According to a recent study by the Aite Group, 70 percent of all U.S. credit cards and 41 percent of debit cards will be EMV enabled by the end of 2015. That is a total of roughly 1.1 billion cards. The cards will still also come with a magnetic strip.
Unlike the European version of the technology that requires a PIN number to be entered to authenticate a transaction, the U.S. version will still allow signatures.
Updating to EMV is not as simple as just creating new cards. It will cost big banks $1.30 for each EMV card and smaller banks could pay between $3 and $5 a card. However, it will also cost retailers and banks several billion dollars as an estimated 13 million point-of-sale systems around the country need to be upgraded or replaced, as will all the ATM machines.
This change to point of sale credit card processing is coming and there is nothing businesses can do to stop it. Instead, organizations need to start paying attention to the industry and start making plans to upgrade.