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News

One year in, reviews
mixed for EMV in U.S.

P ayments industry stakeholders met the one-
year anniversary of chip card implementa-
tion in the United States with a mixture of
celebratory messages and class action law-
suits, revealing a fractured payments landscape.

For example, on Sept. 29, 2016, Visa Inc. reported that
counterfeit card fraud is down and EMV (Europay,
Mastercard and Visa) usage is up. However, on Sept.
30, 2016, a California Federal judge supported anti-trust
proceedings concerning chargeback liability brought by
a group of small retailers against Visa Inc., Mastercard,
Discover Financial Services and American Express Co.,
denying the card brands' motion to dismiss the lawsuit.

Thumbs up

Visa's client financial institutions processed more than
half a billion U.S. EMV transactions during August
2016, an increase of more than 1,000 percent, Visa rep-
resentatives stated. The company also noted that chip-
enabled merchants whose EMV transactions accounted
for at least 80 percent of transaction volumes reported
a 47 percent reduction in counterfeit fraud during May
2016, compared with the same period during the previ-
ous year.

Visa set three objectives for U.S. chip card implemen-
tation: prevent counterfeit card fraud, accelerate mo-
bile payments adoption, and improve convenience and
security for international travelers. Executing on all
three goals has resulted in a considerable uplift across
the United States, with more than 1.46 million chip-
enabled businesses and 363 million chip-enabled Visa
cards, making the United States the largest Visa chip
card market, according to company sources. "Thanks
to efforts across the ecosystem, we're seeing a positive
impact on counterfeit fraud," said Stephanie Ericksen,
Vice President of Risk and Authentication Products at
Visa. "We're focused on continuing that momentum to
bring counterfeit steadily down and simplifying the
way businesses can adopt chip technology."

Thumbs down

Payments analysts in the United States, however, have
observed its impact on the small merchant commu-
nity, many of whom were unprepared for the liability
shift due to lack of instruction, equipment or processor
readiness. As a result, numerous noncompliant retail-
ers are being held responsible for more chargebacks,
regardless of whether the chargebacks had anything
to do with counterfeit fraud, which is the basis for the
California court filing.

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