Now it's debit's turn to shift to EMV

Category: Merchant Processing Industry

For nearly a year at this point, debit and credit card issuers have been trying to push more EMV-enabled cards of all types out to consumers for everyday use. However, it's worth noting that while there has been a rapid increase in the number of chip-and-PIN credit cards nationwide, debit has taken on something of a more "slow but steady" pace over the same period. But now that EMV credit cards have reached a tipping point, it seems that many financial institutions are now trying to address the debit deficiency in this regard.

The EMV liability shift went into effect on Oct. 1 of last year, but debit issuers didn't really start rolling out these new cards until later in the month, according to the 2016 Debit Issuer Study from Pulse. By Halloween, 45 percent of these financial institutions were sending out EMV-enabled debit cards, and by the end of the year, about 1 in every 3 debit cards in the U.S. could use this technology. About 90 percent of card issuers said they'd be distributing them by the end of December 2015.

Chip cards are becoming more common all the time.Chip cards are becoming more common all the time.

Taking the next step
Meanwhile, it's important to note that projections right now show EMV debit going from about one-third of all such cards to nearly 75 percent by year's end, the report said. Moreover, debit use is growing nationwide as consumers continue to eschew credit, and that too, presents unique challenges.

For instance, only about 1 in 9 transactions for a debit EMV card were actually completed using the chip-and-PIN technology last year, the report said. The other 89 percent came with EMV cards being used in the old-fashioned way, relying on the magnetic stripe that is far less secure. Among all debit transactions, EMV made up just 1 in 25 purchases.

"In this sea of change, core debit performance metrics remain strong, with debit use growing with each installment of the study," said Steve Sievert, executive vice president of marketing and communications for Pulse. "This year's results provide key facts behind the shift to chip debit cards and mobile payments, two of the most significant developments within the payments industry."

A more secure future
The issue, though, is that many seem to still be confused with the roll-out of EMV overall, according to a report from the New York Times. While about 75 percent of all cards are now EMV-enabled, and a lot of businesses have made the move to adopt EMV-capable point-of-sale devices, the fact remains that the certification logjam has created some issues with people and even businesses not knowing when and how to use chip-and-PIN transactions. Other issues, such as the transactions taken longer than normal, are still being addressed by payment processors as well.

The fact remains, though, that the future is here when it comes to these types of purchases, and the more merchants can do to make sure both they and their customers understand the change, the better off all involved - including payment processors themselves - are going to be.