DES MOINES, IA (June 20, 2013) One of the biggest questions on the minds of credit and debit card issuers today is this: What are my peers doing to prepare for EMV? To help its clients better understand how they compare to similar financial institutions, payments processor The Members Group (TMG) conducted an EMV survey of its credit card processing clients.
Sixty-two percent of survey respondents said they feel the need to develop an EMV strategy either to reduce fraud losses or to meet the liability shift deadlines put in place by the major card networks. Satisfying cardholders who live, work or frequently travel overseas is another major motivator. Nearly 14 percent of TMG’s clients cite travelers as the primary reason their financial institution is looking to issue EMV cards.
According to Brandon Kuehl, product development architect and a leader of TMG’s EMV operations team, those TMG clients currently undergoing EMV implementation now are pursuing migration as a way to provide a better customer experience, particularly for frequently traveling cardholders. These cardholders, Kuehl said, are increasingly reporting difficulty using mag-stripe cards outside the U.S.
TMG client Alliant Credit Union, of Chicago, Ill., has a significant base of members traveling internationally. As such, an EMV initiative is critical to improving its member experience for those members. “We began our EMV migration planning in 2012 and are in full implementation mode with TMG today,” said Carolyn Hatten-Kissick, Alliant Credit Union senior manager of operations. “While we are, of course, interested in the additional fraud protection promised by EMV, the primary driver for us is our member experience overseas. More kiosks and unmanned terminals in international locations are EMV-enabled, creating a significant challenge for mag-stripe cardholders. We want to give our members dependable, consistent access to their money and believe EMV is an important step to creating that reliable experience for our cardholders throughout the world.”
When it comes to which authentication format TMG clients will be pursuing, chip-and-PIN was the clear winner among decided credit unions and community banks claiming 59 percent of the responses. The survey indicated many are unsure, as another 35 percent have not decided between chip-and-PIN or chip-and-signature formats. Respondents were split almost exactly down the middle in terms of their plans to pursue dual-interface plastics, meaning their EMV cards will be capable of both contact and contactless payments. Among those respondents who have made firm decisions, 45 percent said their cards would support both forms of payment.
Among the survey’s notable findings, only 37 percent of respondents said their plan includes migration to EMV cards prior to October 2015, the month Visa and MasterCard will shift fraud liability to the least secure entity. Another 52 percent were undecided. Kuehl anticipates the great majority of the undecided FIs will make the shift to EMV prior to October 2015 and that most will firm up their implementation strategies within the next 12 months.
To help clients navigate the transition to EMV, TMG is sharing actionable strategies and templates with its entire client base. As well, the payments processor is offering the EMV Client Forum, which allows clients to ask questions not only of TMG experts, but of their peers, as well. Through the Forum, blog posts, webinars and podcasts, TMG also provides updates on industry deadlines, realistic implementation timelines and case studies from like-sized financial institutions.
Because cardholder education is a major component to migrating a portfolio to EMV and more than 75 percent of clients said they would appreciate educational support from TMG, the company is preparing consumer-facing materials, like card carriers, inserts, labels and in-branch displays, to help credit unions and community banks be as successful as possible when replacing their mag-stripe plastic.
TMG has processed EMV payments since 2010 and has a significant queue of issuers working to implement EMV at their institutions today.
About TMG
The Members Group (TMG) is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit www.themembersgroup.com.