In my last post, I examined the first two myths and “truths” presented in a recent downloadable report from Gemalto titled “Four myths and truths about EMV payments.” We looked at some hard numbers regarding the US migration to EMV, as well as the rationale behind adopting EMV at all, as opposed to transitioning straight to mobile payments. These two topics were fairly easy to tackle, but the next two are a bit more complicated. Here is my stance on the last two myths and proposed “truths.”
Myth #3 – EMV isn’t the right solution because it doesn’t address CNP (card-not-present) fraud, leaving e-commerce and online fraud untouched.
Truth – Actually, EMV payment cards enable some of the most successful CNP fraud solutions in the world.
I mentioned in my prior post that I believe Myth 3 and its “truth” minimizes the level of fraud still present after EMV implementation. Actually, Myth 3’s truth never addresses the level of CNP fraud remaining. I have yet to see a report anywhere showing anything other than a spike in CNP fraud after EMV implementation. In fact, some of the growth statistics regarding CNP fraud post-EMV is startling.
The Gemalto report claims that EMV payment cards enable more effective authentication tools for CNP fraud (if only merchants and banks would implement them!), which include one-time-passwords, on-card PIN codes, and personal card readers. All of which likely add another layer of end-user interaction and complication.
Myth 3’s response ends by pointing out that EMV payment cards are a worthwhile solution for card-present fraud reduction alone, and “can enable” strong authentication against CNP fraud too. There is no question that EMV payment cards have significantly reduced card-present fraud following implementation – no doubt worthwhile for those with a card-present-only solution. What is less clear is whether it is worthwhile when CNP fraud is considered a part of total card fraud, especially if it will take significant time, money, and effort to enable additional solutions.
Myth #4 – EMV is expensive and difficult for merchants to deploy.
Truth – EMV payment technology is cheaper and easier for merchants to install than ever before.
Gemalto’s truth statement is technically true. Most technology becomes cheaper as time passes and development continues. That EMV might be less expensive and less difficult to implement now than previously does not alter the fact that the total cost of merchant deployment in the U.S. is projected to run into the several-billion-dollar range. In my opinion, a more credible statement is that EMV implementation is costly and deployments can be time consuming and technically challenging, but that the return on investment can be worth it.
Gemalto states up-front that the purpose of its “Four myths and truths about EMV payments” is to address four of the most common myths associated with the migration to EMV chip cards. I believe it did choose the most common concerns associated with the EMV migration underway in the U.S., however, I believe the responses could have been more direct and precise in context to add credibility to the overall report.
Next up, I’ll submit my own myth about how EMV will simplify the customer experience and then provide my own truth! And I promise to do my best to provide the appropriate amount of context and balance. Until then, we hope you’ll follow the conversation and share your views in the comments or on Twitter, Facebook, or LinkedIn.