Forum priorities include projects addressing implementation of contactless and mobile payments and mitigation of e-commerce fraud
PRINCETON JUNCTION, N.J., April 17, 2019 – The U.S. Payments Forum today released its quarterly Market Snapshot, providing a look at the state of EMV chip adoption in the U.S., fraud, what’s next for payments in 2019 and Forum priorities and projects for the year.
State of the Market: Transit Can Be a Driver for Contactless Adoption
Contact chip payments are now firmly ingrained in the U.S. market, with payments volume coming from chip-enabled merchants approaching 70%[i]. To improve customer experience and provide more payment choice in-stores, the payments industry is now turning its attention to contactless chip technology for fast and secure payments with a tap of a card or mobile device. Momentum is growing: tens of millions of contactless cards are expected to be issued this year and 78 of the top 100 merchants accept contactless payments today.
Just as in other countries, the U.S. Payments Forum expects that transit will be a driver for contactless payments in the U.S. Large transit agencies have moved or are moving to open contactless payments, including in Chicago, Portland and New York.
“What we’ve seen in other countries, and expect to see here, is the contactless ‘halo effect’ when transit riders start using contactless cards,” said Randy Vanderhoof, director of the U.S. Payments Forum. “When a large transit agency moves to open contactless payments, issuers get cards in the hands of riders who quickly get used to tapping and seek it out wherever they can. As a result, contactless transactions rise dramatically at merchants in surrounding geographical areas. We’ve seen this in the U.K. and Canada, and will start to see this in the U.S. this year.”
With contactless technology taking center stage, many people have questions about how contactless devices work and what their security features are. To assist, the U.S. Payments Forum launched the GetContactless.com website and has published implementation resources.
Trending Topics: It’s Not About Being Cashless, It’s About Providing Choice
Recently, several news outlets have been examining alternative checkout trends and whether the U.S. will become a cashless society. But industry stakeholders are sharing within the U.S. Payments Forum that the primary driver for these trends is consumer choice.
“Merchants are offering more alternative checkout options, but it’s not about ‘going cashless.’ There are consumers that want and need to pay cash, and that likely won’t change. It’s really about providing enhanced customer experiences and choice,” said Vanderhoof. “Whether it’s cash, card, contactless, in-app, online, buy online/pick up in store (BOPIS), curbside – merchants are offering more checkout options to provide that choice and flexibility for customers. And they’re doing it at the same time as they are bumping up investment in fraud prevention technologies. Security should always be integrated with all of these new checkout options.”
As merchants and issuers work to secure the e-commerce channel, several authentication methodologies and standards have become available, leaving stakeholders with questions around what they are, what problems they solve and how they fit together. These include EMV 3-D Secure (3DS), W3C Web Payments and Web Authentication, FIDO and EMV Secure Remote Commerce (SRC).
The Forum has already delivered education relating to EMV 3DS including the recent EMV 3-D Secure Data Elements Webinar and plans to deliver a more detailed paper about the use of new EMV 3DS data elements by merchants, issuers and other payments industry stakeholders. The Forum plans additional projects to help the industry understand these different authentication methodologies and standards and how they can best be implemented for payment credential, user and transaction authentication in e-commerce.
Securing the e-commerce channel is the focus of several Forum projects underway including white papers on tokenization and fraud mitigation approaches. Other EMV and emerging technology-related Forum projects underway include:
- A Contactless Open Payments for Transit webinar to provide a high-level overview and implementation guidance for transit open payments
- A white paper on transit contactless open payments use cases for paying with aggregated fares
- A best practices guide for customer-facing terminology for transit agencies implementing contactless open payments
- A white paper providing best practices for contactless transactions at the point of sale (POS)
- Resources providing guidance on streamlining Level 3 contactless testing and certification
- An updated resource on effective approaches for mitigating card-not-present fraud
- A resource to provide a primer and discuss lessons learned with payment tokenization implementation
- An educational resource on emerging data elements used for mobile payments
- A guide on mobile payments standards and specifications
- A resource on authentication methodologies used for mobile in-app and remote payment transactions
Industry resources published in the past quarter were:
- Guidelines for Contactless ATM Transactions white paper. This resource provides guidelines for ATM owners and operators on accepting contactless chip transactions at the ATM.
- GetContactless.com This website answers the most important questions merchants have about contactless payments.
- Mobile and Digital Wallets Lunch and Learn webinar series. This series provides in-depth exploration of mobile wallet models, security approaches and key merchant and issuer considerations for adoption.
- Understanding Fraud Liability for EMV Contact and Contactless Transactions in the U.S. white paper. This updated resource reviews payment network fraud liability policies for EMV contact and contactless transactions in the U.S.
- PIN Bypass in the U.S. Market white paper. This updated resource describes PIN bypass for EMV contact and contactless transactions in the U.S.
- Debunking EMV Myths industry resource answering the most common questions about EMV contact and contactless technology.
Additional resources on contact and contactless chip and other new and emerging technologies are available through the U.S. Payments Forum at www.uspaymentsforum.org, www.emvconnection.com, www.getcontactless.com and @USPaymentsForum.
About the U.S. Payments Forum
The U.S. Payments Forum is a cross-industry body focused on supporting the introduction and implementation of new and emerging technologies that protect the security of, and enhance opportunities for payment transactions within the U.S. The Forum is the only non-profit organization whose membership includes the whole payments ecosystem, ensuring that all stakeholders have the opportunity to coordinate, cooperate on, and have a voice in the future of the U.S. payments industry.
[i] Data collected at the March 2019 U.S. Payments Forum meeting