EMV: The Outlook for 2014
Proponent Predicts 'Many Flavors' of Adoption
In spite of the card brands' claims that a ruling by the U.S. District Court for the District of Columbia against the Federal Reserve had stunted migration toward the Europay, MasterCard, Visa standard, progress is being made, says Vanderhoof, executive director of the Smart Card Alliance.
That ruling, which derailed the Fed's 1-cent per-debit-transaction incentive for investments in fraud prevention, is just a bump in the road, according to the alliance, which is pushing for global smart card adoption (see Will Court Ruling Hurt EMV Rollout?).
And as the payments industry awaits a decision in the Federal Reserve's appeal of that district court ruling, the EMV Migration Forum, created by the Smart Card Alliance, is working to push industry stakeholders forward, Vanerhoof says during this interview with Information Security Media Group.
"Plans are moving forward, and within the next two years there will be a significant part of the marketplace that is ready to go with EMV," Vanderhoof predicts.
"The EMV market for the U.S. is a complicated market because there are a lot of moving parts that need to work together," Vanderhoof says. "One of the things that we found right away is that there are technical issues, as well as questions about how the market is going to get educated about EMV and how consumers are going to get educated about EMV. ... We learned there wasn't going to be a single one way for moving forward. There are going to be a variety of flavors," which will include various options for debit payments, he says.
Sizing Up EMV's Role
Some experts, such as Gartner analyst Anton Chuvakin question whether EMV will ever be a dominant standard in the U.S.
Chuvakin says the U.S. waited too long to transition away from mag-stripe cards. He argues that other emerging payments options will prove better suited for the U.S. infrastructure than EMV.
But Vanderhoof says global demands have necessitated the U.S.'s adoption of EMV. And because EMV is regarded as being a far more secure payments technology, relative to the legacy magnetic-stripe technology still used in the U.S., migration is critical to contain fraud losses, he says.
"There has been a tremendous amount of work that has already been done, even though we have some uncertainty in the market today," Vanderhoof says.
During this interview, Vanderhoof discusses:
- Authentication options the EMV Migration Forum is exploring;
- When the industry might expect a ruling in the Fed's interchange appeal; and
- Why banking institutions and merchants are hoping to deploy EMV credit and debit in tandem.
Vanderhoof is the executive director of the Smart Card Alliance, a not-for-profit, multi-industry association of more than 180 member firms working to accelerate the widespread acceptance of smart card technology in North America and Latin America. He has directed the transformation of the organization from primarily a networking organization into a diverse, education-oriented, international, multi-industry group that helps stimulate the adoption of all forms of smart cards for electronic payments and digital security applications.