By Jeremy Gumbley, CTO, CreditCall
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Since their introduction, EMV chip-based payment credit cards have undoubtedly played a major role in reducing fraud where they have been deployed. While stamping out fraud is a well-documented driver for EMV, it will continue to fall short of this ultimate goal as long as there are regions still operating with the old mag-stripe standard. The problem is that the route to compliance involves some major technology hurdles. The current focus on the US, as one of the latest and last major economies to tackle the transition, is a stark reminder of the sheer scale of the project.
Organisations across the global payments ecosystem face some tough challenges, not least of which is the high cost of implementation. The question is whether these costs will price some organisations out of the EMV picture, creating delays for true global adoption. The answer could come from a technology innovation that is now well-established in many areas of the financial sector – the cloud. This could also prove to be a lifeline for organisations in EMV-mature regions, such as Europe, that have to contend with ongoing technology updates and re-certifications across their payments infrastructure.
For POS hardware manufacturers and integrators, the challenge is to replace or upgrade terminals on behalf of their customers, the merchants. It’s a costly and time-consuming process, requiring the integration of multiple parts – including the card readers with EMV Level 1 and Level 2 Kernels and the necessary PA-DSS and PCI DSS compliance.
An important step is for these terminals to pass extensive EMV testing and certification processes, as set out by EMVCo. Manufacturers bear most of this burden as they need to make sure terminals pass these tests before they are installed at the merchant. Each unit incurs costs and once they are in place they need to accommodate regular software updates and re-certifications.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe smart manufacturers and integrators are finding agile ways to streamline this whole process – and reduce costs along the way. That’s where the cloud could come into its own. This approach puts the EMV Kernel in a cloud-based server and connects to the terminal via a web service. The main advantage of this thin-client approach is that it allows for instant software and EMV configuration updates rather than up to 60 days using a conventional Terminal Management System. Less software sits within the actual terminal itself so it’s less complex and the data management piece is far easier to handle. The size of encrypted EMV data itself is relatively small so is particularly well-suited to being transmitted online.
There are some clear limitations. It won’t suit those operating purely offline, for example, and there is limited support for contactless transactions. However, its agility means we could see it find wider acceptance among those developing payment terminals or terminal alternatives, including mobile POS. What we do know is that the industry needs to collaborate if EMV is to become a global reality. As long as there are organisations left behind, the real benefit to the industry as a whole will remain out of reach.
