By Ray Birch
Tom Davis, CSCU
TAMPA, Fla.—Today marks 30 days and counting until the EMV liability shift deadline on Oct. 1, and it appears as if more merchants will be EMV enabled at POS than originally projected.
That is intelligence provided by Tom Davis, chief technology officer with CSCU, who told CUToday.info that projections earlier this year that just 41% of all merchants being EMV would be ready to process chip-enabled cards by the end of the year will be off by about 20 percentage points.
“We have seen reports that 59% of all merchants will be EMV ready by end of 2015,” said Davis. “It looks like more merchants are getting on board a little faster than we thought. That means credit unions need to be ready, too.”
Following the Oct.1 Visa and MasterCard liability shift deadline, the cost for fraud shifts to the weakest link in transaction. That means if the POS terminal is EMV-enabled and the issuer’s card is not, the issuer foots the fraud bill.
Davis said most of the big retailers have terminals in place and just have to “flip the switch,” estimating that 86% of this group will be ready by the end of the year.
Art Harper, PSCU
Among CSCU issuers, Davis said 99.9% will be ready with credit by the liability shift deadline, with debit trailing that total by about 50%.
“We expect to see about a six-month lag in debit compared to credit,” estimated Davis.
Art Harper, director of solutions consulting at PSCU, St. Petersburg, Fla., set the total for tier-one merchants to be EMV enabled by Oct. 1 at 65%-70%.
“Regional merchants are slightly behind at around 60%,” Harper said.
As many analysts have stated all year, tier-three merchants—mom-and-pop stores—are well behind, with 30%-33% expected to be EMV enabled by Oct. 1.
“But I think we could see the smaller merchants move faster just before the holiday season,” said Harper.
PSCU is projecting that 95%-97% of its credit issuers will be will be EMV ready by the liability shift deadline.
Shazia Manus, TMG
“Debit will be closer to 50%-55%,” said Harper. “But we expect that number to climb to 70% by the end of 2015.”
At The Members Group, Des Moines, Iowa, 98% of the company’s credit card issuers will be EMV ready by the end of the year, with the large majority already completing the process, said CEO Shazia Manus.
TMG worked closely with each of its credit issuers, creating a streamlined process using “templates” that simplified moving the card base to EMV, said Manus, reminding that TMG was instrumental in getting the country’s first EMV program running at United Nation’s FCU in New York.
“We did that when EMV was not the most trendy thing,” explained Manus.
On the debit side of the house, 30% of TMG clients should be issuing EMV by the end of the year with that figure expected to double by the second quarter of 2016, explained Product Manager Chole Casber.
Manus emphasized that the Oct. 1 liability shift deadline by Visa and MasterCard is not a mandate.
Michelle Thornton, CO-OP Financial Services
“The first thing to keep in mind is the world will not face Doomsday on October 1,” said Manus. “Mag stripe will still work. Yes, the world is moving to EMV, but this is an iterative journey without panic.”
Michelle Thornton, manager of core products for CO-OP Financial Services, Rancho Cucamonga, Calif., reminded that if an issuer is not EMV ready by Oct. 1, the FI is not accepting greater fraud liability, as issuers now—not retailers—pay for fraud costs. But those issuers are missing the chance to offload a potential expense, she said.
“So credit unions don’t need to panic about this deadline, they have the liability today. If they are not ready, they will have the liability tomorrow,” Thornton said. “We see most of our clients taking this deadline in stride—starting on their projects, working on them in 2015 and 2016, but trying to do this as a reasonable rollout and one that makes sense for their credit union.”
Thornton, as well as several other experts, said that often means a combination of reissuing in mass for certain member segments, such as international travelers, then just replacing cards as they naturally expire.
“I would say most of our credit clients are, or have been moving forward with EMV and a large portion of our debit clients as well,” Thornton said.