to moving forward on EMV in the US has been a long time coming. It
has been tried and tested across the world, and the case for its
implementation is undeniably strong.
But it is easy to over-estimate the
impact. The reality is that card not present and online fraud are
the biggest security threats out there at the moment, and are only
set to become more problematic going forward.
The move to chip and PIN, Visa
says, is essential to enable mobile payments to take off.
The hope is that by presenting
banks and retailers with the threat of missing the mobile payments
train, EMV will finally gain the support in has always lacked in
The threat seems fundamentally
flawed. It is not strictly true EMV is essential to the future
development of mobile payments. It is clearly important in the
development of NFC and contactless via mobile handsets, but plenty
of mobile payments solutions are being developed that do not rely
on secure chip technology at all. And a great many of those ideas
are coming out of the US.
When we talk about mobile payments,
NFC and contactless is a red herring. It is already starting to
feel like retro-fitting – the reverse engineering of plastic cards
to keep chip manufacturers in the game. The biggest inventive leaps
in payments are by-passing card schemes, and even banks, not to
mention those manufacturers.
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With Visa making major investments
in Fundamo and Monetise, and with increasing momentum behind P2P
payments solutions in general, it could well be argued that banks
could indeed be better off investing in the development of apps and
mobile services to facilitate payments more conveniently, rather
than upgrading all their infrastructure to meet EMV
Card fraud still an
That said, we are probably getting
a few years ahead of ourselves. Card technology will be around for
quite some time to come, and it does not make sense for US banks to
allow their country to become the world’s major card fraud hub. As
such Visa’s determination should be welcomed. From a fraud
perspective, it is a shame this did not happen a little
As it stands it is not really about
pushing on into the brave new world of mobile payments, but about
managing the global reputation of US retail banks. There is the
mounting evidence of card fraud and there is the fact US citizens
are facing increasing difficulties using their cards overseas.
But if mobile banking and payments
continue on their current trajectory, US issuers and merchants
could be better off thinking way outside the card scheme box and
truly maximising the potential of the mobile platform.
Read our news analysis here.