PRINCETON JUNCTION, N.J., August 9, 2018 – EMV chip card payments are helping to prevent in-store counterfeit card fraud, and the U.S. payments industry continues to focus on payment technology implementations that can increase security while creating convenient cross-channel experiences, according to the U.S. Payments Forum. The Forum today released its Summer 2018 Market Snapshot, providing updates on the status of the U.S. EMV chip migration, next phases for emerging payments technology implementations, and recently-released resources for the payments industry.
State of the Market: EMV is working to prevent in-store fraud, industry eyes contactless
Chip card payments are working to reduce in-store counterfeit card fraud, payments stakeholders shared at the latest U.S. Payments Forum meeting. This is due to the rise of overall chip-on-chip transactions as more merchants are accepting chip payments. According to the global payment networks[i], chip-on-chip transactions have reached approximately 57 percent, which represents around 60 percent of payment volume. In addition, contact chip is now enabled at 58 percent of all merchant locations and 85 percent of ATMs.
“The first phase of the chip migration was about getting cards in the market and merchants enabled to accept contact chip card payments to stop the onslaught of in-store counterfeit card fraud and protect consumers. Now that we see the chip card rollout reaching critical mass and delivering on its benefits, the next phases of in-store payment technology implementations are about continuing that security while making the paying process easier for consumers,” said Randy Vanderhoof, director of the U.S. Payments Forum.
To accomplish this, many stakeholders are considering or implementing contactless payments.
“Many card issuers have dual-interface[ii] cards in the plans for the next reissuance cycle, and on the certification front we are seeing more merchants coming in for additional certifications as they add new features including contactless,” said Vanderhoof. “Our members are telling us that they are seeing more contactless transactions happening in areas where more dual-interface cards have been issued, indicating that consumers will tap if they have the opportunity.”
As card issuers and merchants work on ways to leverage the EMV infrastructure to streamline transactions at the point-of-sale, including leveraging contactless payments, the U.S. Payments Forum provides the venue to ask questions, solve issues and get implementation guidance. Recently, the Forum published “Contactless Resources: Implementation Considerations and Clarifications,” which provides a summary of recently-published resources that provide guidance when implementing contactless payments in the U.S. The Forum also has several contactless payment-related resources in the works including: targeted education on contactless payments for issuers, retailers, restaurant staff and customers; guidelines for accepting contactless transactions at the ATM; and white papers on transit contactless open payments use cases for paying with aggregated fares and mobile devices.
Trending Topics: Fraudsters switching tactics as merchants add new shopping options
Enabling more secure and convenient transactions does not stop with traditional in-store payments and continues to be important as more retailers aim to create better cross-channel experiences. This includes buy online pick up in store (BOPIS) options, where fraudsters are turning their attention.
“With chip card payments working to reduce fraud at the point of sale, criminals are looking for new avenues – and BOPIS fraud as well as traditional card-not-present (CNP) e-commerce fraud are two of them. We have to shut down these channels to criminals but adding friction to the buying experience while doing so would be problematic,” said Vanderhoof. “The Forum will be turning its attention to new specifications such as EMV 3D Secure 2.0 and Secure Remote Commerce as well as other authentication methods that promise to enable the kind of frictionless security the industry needs.”
U.S. payments stakeholders have many questions around new e-commerce specifications since their initial release and it is expected that these questions will continue to grow as testing and implementation begin. Just as the Forum has been instrumental in providing implementation guidance and best practices around the EMV chip card specifications, the Forum will be providing that same implementation guidance to the U.S. market as new e-commerce specifications emerge.
Forum Priorities: CNP, transit, petroleum
In addition to its contactless projects and examination of specifications relating to securing the e-commerce channel, the U.S. Payments Forum has several other CNP projects underway including white papers detailing the true cost of fraud, CNP fraud mitigation approaches, and fraud prevention pathways.
Chip card payments continue to be a major focus for the Forum. “The chip migration is still not yet complete. Providing implementation guidance to merchant segments with unique considerations such as transit, petroleum and restaurants is still a major focus and we encourage those merchants to participate at the Forum and raise their questions to get issues resolved,” added Vanderhoof.
Other EMV and emerging technology-related Forum projects not previously mentioned include:
- A transit payments 101 webinar to provide a high-level overview and implementation guidance for transit open payments
- A white paper on EMV fleet card processing requirements for the petroleum industry
- A resource to discuss lessons learned regarding tokenization implementation
- A technical white paper on accepting Canadian chip cards at U.S. merchants
- An educational resource on use cases for wallet identifiers for mobile payments
- A white paper on dual-interface card personalization considerations for issuers
- Updates to white papers to provide guidance on implementing PIN bypass for contactless transactions
Every quarter, the U.S. Payments Forum publishes resources on EMV and contactless payments implementation and optimization guidance. This quarter, the Forum published its “Signature Best Practices” white paper to educate stakeholders on signature requirements in the U.S., including how they’re used, recent changes in requirements and implications of chargebacks and fallback. The Forum also published an update to its “U.S. Debit EMV Technical Proposal” to clarify consumer application selection.
Since January, the U.S. Payments Forum has published the following resources on EMV and contactless payments implementation and optimization guidance:
- “Signature Best Practices” white paper. This resource helps stakeholders better understand signature requirements, and to provide best practices on capturing and storing them
- “U.S. Debit EMV Technical Proposal” update to clarify consumer application selection
- “Merchant and Issuer Error Data Collection Forms” resource. These tools assist merchants, issuers and their partners in gathering information to determine the source of any chip transaction errors
- “Mobile and Contactless Payments Requirements and Interactions” white paper. This resource discusses how mobile and contactless payments requirements are collected from payments ecosystem stakeholders
- “Mobile and Digital Wallets: U.S. Landscape and Strategic Considerations for Merchants and Financial Institutions” white paper. This document provides guidance to merchants and financial institutions on models, technologies and usage drivers for mobile and digital wallets
- “Contactless Resources: Implementation Considerations and Clarifications” resource. This document provides a summary of recently-published resources that provide guidance when implementing contactless payments in the U.S.
Members of the merchant and issuing communities, as well as other stakeholders across the payments industry that are interested in having a more active voice in the U.S. implementation of emerging payments technologies are encouraged to participate in the U.S. Payments Forum’s next meeting to share their experiences and learn from their peers. Visit www.uspaymentsforum.org to learn more about joining the Forum, attending quarterly Forum meetings and participating in working committees. The next Forum member meeting is being held November 6-7, 2018 at the Hyatt Lodge, Oak Brook, IL.
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 from American Express, Discover, Mastercard and Visa at July 2018 U.S. Payments Forum meeting
[ii] Dual-interface cards are cards with both contact and contactless capabilities