PRINCETON JUNCTION, N.J., March 25, 2020 – The U.S. Payments Forum today released its latest Market Snapshot, providing a look at the transition to EMV at the pump, trending topics within the industry, and current Forum priorities and projects.
“We understand that with the current COVID-19 situation, these are challenging times for many,” said Randy Vanderhoof, director of the U.S. Payments Forum. “For those working to sustain business as usual, the Forum is continuing to provide insight and updates around top-of-mind payments topics within the industry through its Market Snapshot to help with moving activities and projects forward.”
State of the Market: Contactless hits its stride and EMV at the fuel pump remains a priority
Contactless is finding its place in the U.S., particularly in transit. The Metropolitan Transportation Authority (MTA) reported that the OMNY system had surpassed 5 million total taps in January since the start of the pilot. Transit is a major driver of the technology, but acceptance is still not uniform in other retail outlets. As more opportunities to tap become available, Juniper Research has predicted the contactless payment market will triple by 2024.
Stakeholders at the meeting agreed that contactless payments are on the rise, likely due to the increase in plastic card issuance. While there’s still variation in contactless acceptance across the U.S., Mastercard and Visa have reported that eight of the top 10 merchants are accepting contactless payments, and they also confirm that approximately 63% or more of all transactions are taking place at contactless-enabled merchants. With this technology in place, the industry is calling for more education for consumers on contactless, better signage at the point of sale and a consistent consumer experience to encourage usage across the U.S.
The EMV chip migration at the fuel pump also remains a priority for the industry as the October 2020 fraud liability shift approaches. Current data from Connexus indicates 40% of locations are expected to implement EMV by October. For petroleum merchants looking to make the shift, many are focused on transitioning higher-risk locations supporting larger transaction volumes.
“Refocusing efforts on locations with higher transaction volumes is a logical strategy as we move closer to the liability shift date. This will lead to a larger number of EMV-protected transactions, which is ultimately the goal we’re working towards in the U.S.,” said Vanderhoof. “For those who won’t be EMV-enabled by October, the industry is also looking to provide more education, streamline certification and find cost-effective ways for petroleum retailers to certify and implement the technology.”
Challenges that persist for this unique environment include certification, cost, hardware availability and technician capacity. The major payment networks are addressing these challenges with streamlined certification options and industry stakeholders are providing education to support those that are not expected to meet the liability shift date.
Trending Topics: Securing Online Transactions with 3DS, SRC and Digital Identity
U.S. e-commerce sales grew nearly 15% in 2019. As growth in online purchasing continues, combating card-not-present (CNP) fraud remains a major focus for the industry. EMV 3-D Secure (3DS) and Secure Remote Commerce (SRC) have emerged as solutions to secure online payments, but more information is needed on these technologies to encourage adoption. The U.S. Payments Forum is currently working on an EMV 3DS resource for merchants and issuers and plans to release it in the coming months.
There’s also been interest around using digital identity solutions to tackle the growing rates of account-based fraud. Financial institution respondents in a recent Aite Group survey reported identity fraud rates as eight times higher in digital channels compared to the branch. With digital identity solutions, issuers can avoid application fraud, which often results in identity theft, synthetic identity fraud and first-party fraud.
Another identity solution on the horizon is the mobile driver’s license (mDL) which could soon be a means to verify identity for retailers and issuers. As states begin piloting mDL technology, the industry representing the potential parties that rely on driver’s licenses for identification and age eligibility purposes like retailers and issuers are evaluating and making progress on understanding the requirements for use in different settings.
Forum Priorities: A Focus on Debit Routing with New Working Committee
Debit routing has been a critical topic in the industry, and the U.S. Payments Forum has formed a new Debit Routing Working Committee to focus on the issues and challenges that are currently impacting the industry. The group intends to identify and describe options for successful U.S. debit routing for EMV contact and contactless, mobile, ecommerce, and emerging technology transactions, regardless of presentment method. The Working Committee is being led by issuer, merchant, acquirer and debit network co-chairs.
The Debit Routing Working Committee held its first in-person meeting in Salt Lake City at the U.S. Payments Forum Member Meeting this February and has already received broad participation from members across the Forum.
The Forum has numerous other EMV and emerging technology-related Forum projects currently underway, including:
- A resource on device authentication and cardholder verification techniques for mobile in-app and remote payments
- A primer on EMV 3-D Secure
- A glossary of card-not-present fraud tools
- A white paper on cardholder verification method (CVM) choice at unattended terminals
- A white paper on best practices for automatic fuel dispenser (AFD) fallback transaction processing
- A project documenting retailer and financial institution use cases for mobile driver’s licenses
- A webinar on dual-interface (contact and contactless) card personalization
- A guide providing best practices on customer messaging for transit contactless open payments
- A white paper providing recommendations to enhance the understanding of common EMV terminology used in certification intake forms
The U.S. Payments Forum published the following resources over the past quarter:
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.
The next U.S. Payments Forum Member Meetings will be held July 14-15, 2020 in Charlotte, North Carolina. For more information visit http://www.cvent.com/events/u-s-payments-forum-meeting-charlotte-july-20/event-summary-a41a6d20beef4102af0121410c90d88b.aspx.
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.
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