A Quick and Dirty Cost-Benefit Analysis on EMV
by. Brandon Kuehl
Most issuers understand it’s no longer a question of “if” they should implement an EMV strategy. With pressure from the major card networks to get on board, issuers and merchants alike know it’s certainly now a question of “when.”
As financial institutions (FIs) begin to map out their EMV-migration strategies, most will want to be prepared to share the business case with management and their boards. To get you started, here’s a quick and dirty list of factors to consider as you map out the cost-benefit analysis of implementing EMV now.
Benefits
- Starting now puts you ahead of the curve and allows you to learn what works and what doesn’t ahead of your competitors.
- You’ll be ready for the major card networks’ liability shift, set for October 2015.
- You will have time to refine your EMV chip cards before mass issuance.
- Potential exists to earn business from new cardholders, particularly those who live or travel internationally, over competitors that don’t offer EMV.
- Launching an EMV product now allows you more time to educate cardholders prior to the country’s full migration.
- Following migration, some fraud losses may shift away from your FI and to merchants.
Costs
- A chip-card requires higher implementation cost.
- There is a longer startup process.
- Because the country is only at the beginning, there are a limited number of knowledgeable resources to guide you. You’ll need to partner with the best.