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The impact of EMV migration on the global cards payments infrastructure: How it will change and expand card use
Journal of Payments Strategy & Systems,
1
(2),
104-115
(2007)
Abstract
The migration from payment cards using magnetic stripe technology to chip-based solutions is in full swing in most parts of the world. It is first and foremost driven by the need to reduce the fraud associated with counterfeiting cards or taking advantage of lost or stolen cards, as well as the cost of administering this fraud. Additionally, chip-based payment cards offer many advantages to all stakeholders above and beyond sheer fraud reduction, eg they enable convenient and secure low-value payments and efficient cardholder loyalty schemes. In combination with contactless transaction technology, chip provides a very attractive way to speed up overall checkout times at the point of interaction. This paper describes the relevant EMV (Europay/MasterCard/Visa) standards that allow for secure investments in the chip card infrastructure, the costs and benefits to banks, merchants and consumers, and assesses the impact of the migration itself. It then elaborates on the opportunities for creating new business value in the financial industry based on the capabilities and features of chip technology, thereby increasing the return on the initial investment and appeal of card products to both consumers and merchants.
Keywords: EMV; chip cards; fraud reduction; contactless; low-value payments; secure remote authentication
The full article is available to subscribers to the journal.
Author's Biography
Toni Merschen PhD is responsible for managing all business and technology aspects, development and deployment of chip-based business solutions for MasterCard’s global Advanced Payment Solutions department. In this role, he is responsible for developing, coordinating and executing MasterCard’s chip strategies and tactics on a global basis. Toni is head of the MasterCard global Chip Centre of Excellence, which leverages its extensive and unique chip expertise to support MasterCard customers around the world in designing and deploying innovative chip solutions which create business value for banks, merchants and consumers. The Chip Centre of Excellence is headquartered in Waterloo, Belgium, and has additional staff in London and Warrington, UK, Singapore, Dubai, Toronto and Miami. Prior to joining MasterCard Worldwide, Toni was head of Citigroup’s global competence centre for chip card-enabled solutions, mobile financial services, PKI and biometrics, located in New York. Prior to joining Citibank, he had numerous engineering, development and marketing responsibilities within IBM over a 14-year period, with assignments in Germany, the UK and New York, including worldwide responsibility for their research and development activities and strategic alliances for smart card technology and solutions. Toni represents MasterCard on the Executive Committee of EMVCo, the company that manages EMV (Europay/MasterCard/Visa), the global chipbased payments standard. He holds a PhD and a Masters degree in mathematics and physics from the Technical University of Aachen, Germany.
