Princeton Junction, N.J., April 28, 2017 – The U.S. Payments Forum today released its spring 2017 market snapshot, providing updates on the status of the U.S. EMV chip migration, 2017 priorities to address open payments in transit, recently-released resources for the payments industry, and announced its top contributors and honor roll members for 2016.
State of the Market: Solid Growth in Merchant EMV Chip Enablement
The migration to EMV chip technology in the U.S. is making continued progress, with solid merchant enablement growth since the Forum’s last snapshot. New data from The Strawhecker Group shows 52 percent of merchants today are enabled to accept chip payments, 36 percent have contactless-capable terminals, and 28 percent of those contactless-capable terminals are activated to accept contactless cards[i]. With regard to chip card issuance, Glenbrook Partners recently reported that 63 percent of all cards in the market are chip cards, with 81 percent of credit cards and 46 percent of debit cards converted to chip[ii]. To continue the forward momentum, the U.S. Payments Forum will continue to prioritize providing implementation guidance and best practices to merchant segments – such as petroleum and hospitality – that have unique needs and challenges in their migrations to chip.
Trending Topics: Fraud in the Card-Not-Present Channel
In addition to its focus on the chip migration to reduce in-store counterfeit card fraud, providing guidance on methods to mitigate fraud in e- and m-commerce channels is another top priority for the U.S. Payments Forum. With reports varying on the status of card-not-present (CNP) fraud in the U.S., the Forum is providing clarifications on what is happening in the market:
“Some of the reports of large rises in CNP fraud seem to be conflating consumer perception of fraud with actual fraud data. It’s important to understand all of the factors at play with what’s happening with CNP fraud in the U.S.,” said Randy Vanderhoof, executive director of the U.S. Payments Forum. “There is the steady progress of the chip migration, which is closing off the card-present channel for fraudsters. At the same time, growth in transaction volumes in e- and m-commerce channels is accelerating. So while industry data and corresponding media reports are stating an overall rise in CNP fraud, what we are actually seeing is that the overall proportion of CNP fraud is actually staying relatively even – and perhaps even decreasing – as a percentage of online sales[iii].”
Vanderhoof continued, “It remains critical for merchants and issuers to stay vigilant against fraud in all channels, and to that end the U.S. Payments Forum is working to provide the industry with the best available knowledge on how they can implement CNP prevention measures, and at the same time work to prevent fraud at the point of sale.”
The Forum recently published a white paper that analyzes experiences and fraud mitigation methods from countries around the world to guide efforts to mitigate CNP fraud in the U.S. More details about this white paper are included below.
U.S. Payments Forum Priorities: Transit Contactless Open Payments
The U.S. migration to chip payments has unique impacts on the transit industry, with many agencies moving towards open loop contactless fare systems. To help align requirements among industry stakeholders, the U.S. Payments Forum has created the Transit Contactless Open Payments Working Committee.
The Transit Contactless Open Payments Working Committee aims to bring the transit industry together with the payments industry to work collaboratively to identify the unique requirements for transit payments and explore possible solutions that address the challenges of implementing contactless open payments within transit’s unique retail environment.
This committee is led by co-chairs Jennifer Dogin, Mastercard; Josh Martiesian, Metropolitan Transportation Authority; and Nick Pisarev, Giesecke & Devrient, and includes and invites new members across a wide range of stakeholder groups, including issuers, transit agencies, acquirers/processors, mobile wallet providers, payment networks, and others.
The Transit Contactless Open Payments Working Committee held its first in-person working session at the U.S. Payments Forum member meeting last month in Orlando, Florida, where members across the payments and transit communities began planning for projects in the coming months to address transit open payments in the U.S.
Over the last quarter, the U.S. Payments Forum and its members have published the following resources on EMV implementation guidance and optimization and card-not-present fraud mitigation approaches for the industry. These resources include:
- “Card-Not-Present Fraud Around the World” white paper. The Forum released this white paper to provide analysis of card-not-present fraud around the world, identify the tools that were used to mitigate the fraud in different countries, and offer guidance based on this analysis to help the U.S. payments industry in mitigating CNP fraud.
- “Optimizing Transaction Speed at the POS” white paper. The Forum has revised this white paper to include an appendix with Q&A specific to the solutions separately announced by American Express, Discover, Mastercard and Visa to optimize online-only EMV transaction processing to enable faster EMV transactions.
- U.S. Payments Forum website. The Forum launched its new website, www.uspaymentsforum.org, to provide information and resources for members, non-members and those interested in joining the Forum.
The U.S. Payments Forum has also announced its top individual contributors and 2016 Honor Roll, which includes individuals who were leading contributors and participants in the Forum projects and activities from January through December 2016. The full Honor Roll and list of contributors is available at https://www.uspaymentsforum.org/working-committees-sigs/2016-u-s-payments-forum-member-recognition/.
Stakeholders across the payments industry that are interested in having a more active voice in the U.S. migration to EMV chip technology and implementation of other emerging payments technologies should visit https://www.uspaymentsforum.org to learn more about membership, attending quarterly Forum meetings and participating in working committees. The next Forum member meeting is June 21-22, 2017, at the Renaissance Downtown Hotel in Phoenix, Arizona.
To read the winter 2017 market snapshot, visit https://www.uspaymentsforum.org/us-payments-forum-winter-market-snapshot-top-priorities-for-2017-include-accelerating-merchant-chip-enablement-securing-the-card-not-present-channel/.
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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[iii] Aite Group 2017. Recently-updated projections from Aite Group emphasizes the correlation between the growth in fraud in the card-not-present channel and similar growth in transaction volume over the past five years, and predicts a similar trend through 2020.