Late last year, the long-awaited EMV card liability shift for tier-one retailers finally happened, and dramatically changed the ways in which millions of consumers complete transactions in their daily lives. However, even in the lead-up to that date late in the year, card issuers were clearly looking to get out in front of the trend, putting hundreds of millions of EMV cards into circulation over the course of 2015.
On a global level, about 2 billion debit and credit cards with EMV chips built in were issued over the course of last year, but about 1 in every 4 of those cards were in the U.S. alone, according to a report from high-tech EMV card manufacturer SmartMetric. That worldwide number was more than half of the total in circulation globally at the end of 2014, when just 3.4 billion such cards had been sent out.
Why is this important?
Certainly, this highlights just how eager card issuers have been to get more EMV transactions into the payments ecosystem on the whole, the report said. The reason there has been such a big push toward this relatively new type of payment platform - which obviously includes the initial liability shift itself, which is going to spread out to include more types of businesses in the next few years - is that EMV transactions are far more secure than traditional magnetic stripes. Specifically, this is because EMV makes it much more difficult, if not impossible, to duplicate account information and make a fraudulent card.
Plenty of data suggests that when EMV increases, the number of fraudulent purchases in brick-and-mortar retail locations tends to drop significantly. Before the liability shift, the U.S. routinely led the world in payment card fraud for a litany of reasons, including that lack of security.
Why adopt now?
Of course many smaller companies are not currently affected by the liability shift (in which the businesses are responsible for the damages on fraudulent non-EMV transactions), but many have started their migration anyway. The reasons for this are myriad, but they relate back to consumer preference - i.e. that people are now getting used to using EMV on a regular basis - and the fact that reducing fraud also reduces headaches for all involved. When claims of fraudulent payments on an account are made, that starts a lengthy process that can be a significant distraction from daily operations for smaller companies. But EMV reduces that risk, and is therefore beneficial to merchants, consumers, and payment processing companies alike.
Moreover, with EMV card readers now so widely available and falling in price, it's also a good investment for any company. The fact is that the liability shift will come for everyone eventually, and being an early adopter can help businesses better deal with the transition, giving them time to work out whatever kinks they may encounter, however unlikely.