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MasterCard Clarifies Its EMV Plans, Paints An EMV E-Commerce Future
McGrath also spoke of an E-Commerce future where EMV is used to authenticate online transactions and referenced a deal MasterCard announced in November 2011 with Intel, in which the chipmaker will add in a wide range of security capabilities—including the ability to interact with EMV chips—in future hardware.
He argues that some of these equipped systems may not need any add-ons—such as a USB device into which an EMV card could be inserted—and would simply wirelessly detect and interact with the card or the mobile device. “It may not require the consumers to adopt anything,” he said.
Adopt something? Maybe not. But agree to pay for higher priced hardware? Almost certainly. Unless someone such as MasterCard chooses to highly subsidize the enhanced hardware (quite unlikely), the cost is likely to discourage purchases. Indeed, there are many who question how many years of useful life desktops and laptops have, in an increasingly smartphone- and tablet-oriented world.
On the plus side, E-tailers are unlikely to need to do a lot of expensive changes to accommodate these authentications, as opposed to in-store efforts to deal with mobile coupons and mobile CRM. The in-store challenge is that they can’t wait until enough consumers have such functionality. Processors will make the acceptance of these authentications simple. The question is whether any consumer transactions will be using them for years. Most likely, in-store mobile transactions—using one of the many wallet applications (Google Wallet, PayPal, ISIS, maybe Apple) with secure elements—will make it academic.
All of this, though, is aimed at pushing retailers to have a reason to upgrade their systems to accept EMV. Many retailers are resisting, and for good reason: there’s not much of—OK, almost any—economic ROI justification for paying for such upgrades. This is triply true because many chains have recently upgraded their systems and a slight reduction in PCI paperwork is hardly a game-changer.
Actually, there is a reason for most chains to strongly consider moving to these EMV-friendly terminals, and it has little to do with Visa or MasterCard and certainly not with PCI. Mobile purchases are going to soar in 2012, and chains are going to want to facilitate those as aggressively as possible. Given that mobile wallets are generally using EMV, it will be consumer demands that will push the EMV terminals.
-Marc
February 14th, 2012 at 5:58 pm
So we will finally join the rest of the developed world and adopt the EMV credit card technology. There are at least two very good reasons why this will benefit all Americans and by itself better data security is more than enough to justify the effort. Yes, there is the argument that, as cardholders are fully protected against fraud, limiting it would only benefit the card issuers and processors. Well, even if that were the case, consumers would still benefit from the fact that their credit cards will be usable in Europe. However, minimizing fraud does matter to consumers, as the issuers’ fraud losses are reflected in the levels of interest rates and penalty fees we pay.