PRINCETON JUNCTION, N.J., August 15, 2019 – The U.S. Payments Forum today released its latest Market Snapshot, providing a look at the state of EMV chip adoption in the U.S., trending topics within the industry, and current Forum priorities and projects.
State of the Market: Updates on EMV testing and certification and the AFD liability shift
Contact EMV chip technology is now well-established in the U.S. – 63% of in-store payment terminals are chip-enabled, and 68% of total transactions today are chip-on-chip. As a result, key aspects of implementation such as testing and certification processes for in-store terminals have stabilized. While merchants are continuing to upgrade existing terminals and/or obtain recertifications, timelines have normalized and those in need of testing better understand how to build the process into their implementation plans.
“With the initial rollout of chip technology, we saw a rush of merchants trying to get their in-store hardware and software solutions through testing and certification, which created a backlog,” said Randy Vanderhoof, director of the U.S. Payments Forum. “Today, EMV chip technology is ‘business as usual’ for much of the industry. As a result, merchants have a better idea of what to expect and what these timelines look like for getting in-store solutions to market.”
With unique requirements for EMV implementation in the automated fuel dispenser (AFD) environment, there is still work to be done to meet the approaching fraud liability shift set for October 1, 2020. In a recent Conexxus survey of petroleum retailers, 42% reported that they already are, or will be 100% deployed by the liability shift date, citing software, cost, and testing and certifications as challenges for implementation[i].
Trending Topics: With many ways to pay, the best practice is to provide choices
Will the U.S. ever become a cashless society? This has been the topic of many articles published over the past several months, and the views have been mixed. Stakeholders have shared with the U.S. Payments Forum that going cashless is not a goal for the industry.
“Ultimately, the issuers and merchants are looking to provide customers with the best possible experience when it comes to payments,” Vanderhoof said. “This means offering more choices for payment rather than taking them away.”
Instead, many issuers and merchants are focused on ramping up contactless efforts to improve the in-store customer experience.
There has been a significant push to get contactless cards into market this year with several large issuers announcing plans for mass-reissuance, including Bank of America, Wells Fargo and Chase. Smaller issuers have also prioritized contactless and many plan to include contactless with the next reissuance cycle, which may be as early as Q4[ii].
Today, contactless acceptance is ahead of issuance in the U.S., with 78 of the top 100 merchants accepting contactless payments. As contactless cards make it into the hands of consumers and use of contactless in transit becomes the norm, consumer demand for acceptance of this technology will grow. As a result, the Forum expects more merchants will seek education on contactless to inform implementation decisions. Recently the U.S. Payments Forum published “Consumer Experience at the Contactless Point-of-Sale,” a resource to help issuers and merchants to improve the consumer experience at the POS through best practices for contactless acceptance.
The Forum has several other resources on contactless implementation available on its website, including recommended solutions to reduce deployment time for EMV level 3 contactless certification; a webinar on contactless open payments for transit; a website for merchants interested in accepting contactless; guidelines for contactless ATM transactions and more.
Synthetic identity fraud, the fastest-growing form of identity fraud in the U.S., and other emerging methods of online fraud continue to demand stronger online authentication and security practices. The U.S. Payments Forum and its members are actively focused on providing education and implementation guidance around several methodologies for securing the e-commerce channel, including EMV 3-D Secure (3DS), EMV Secure Remote Commerce (SRC) and tokenization.
The Forum has several EMV and emerging technology-related Forum projects currently underway, including:
- An updated resource on accepting contactless transactions at the ATM
- A webinar on contactless experiences at the POS
- A webinar series on dual-interface (contact and contactless) card personalization
- A guide providing best practices on customer messaging for transit contactless open payments
- A glossary for card-not-present fraud tools
- A white paper on emerging data elements used in mobile wallets
- A guide for mobile payments standards
- A resource on device authentication and cardholder verification techniques for mobile in-app and remote payments
- A white paper on cardholder verification method (CVM) choice at unattended terminals
- Continued work on approaches to streamline EMV testing and certification
The U.S. Payments Forum published the following white papers over the past quarter:
- Consumer Experience at the Contactless Point-of-Sale
- EMV Payment Tokenization Primer and Lessons Learned
- EMV Level 3 Contactless Certification Recommended Solutions to Reduce Deployment Time
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.
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[i] Preliminary data shared at the U.S. Payments Forum 2019 July All-Member Meeting
[ii] As reported at the U.S. Payments Forum 2019 July All-Member Meeting