Jan McGrath, MasterCard
MONTREAL, Quebec—Should a credit union convert its card base to EMV and choose to go with chip and signature out of the gate, it should be prepared for the membership, possibly within a year, to ask for chip and PIN.
Jan McGrath, business leader, U.S. product delivery for MasterCard Worldwide, offered that advice to attendees at NAFCU’s annual meeting here. She contends that when consumers gain more awareness of PIN and wanting the better security of PIN-based EMV, they will be knocking on the credit union’s doors for the payment method.
Several experts have stated that the majority of issuers and retailers will opt for chip and signature at first due to the transaction type being simpler for the consumer, who is already being asked to make a payment behavior change. McGrath is not so sure signing at POS will automatically be the early winner.
She said currently issuers converting cardholders to EMV are split evenly on the two options.
Consumers Want Chip And PIN
McGrath cited MasterCard data that shows consumer interest in PIN is rising, moving from 37% in 2013 to 49% in 2015.
“This is not because they love using a PIN. Again, consumers are learning PIN is more secure,” said McGrath. “So if you start with chip and signature, be ready for member requests for PIN and make them part of your planning.”
McGrath also advised credit unions to check with their processor to make sure the company can handle all of the card verification methods (CVM) the CU foresees its members needing.
With cardholder communications, McGrath said to be ready with some succinct, straightforward materials. She said many EMV terminals will have instruction videos that will play, with consumer research showing the videos are effective at quickly educating cardholders. Early studies on EMV card swipes also indicate a low fallback rate (3%), where consumers fail or the POS device fails, and the transaction has to revert to mag stripe.
Consumer Education
McGrath shared findings from research on consumers using EMV for the first time, suggesting CUs might consider addressing the issues in educational materials:
- 38% remove the card too soon
- 22% still try to swipe
- 10% insert the card the wrong or erred with their PIN entry