DES MOINES, Iowa (6/21/13)--Sixty-two percent of credit union and community bank respondents to a survey by The Members Group (TMG) said they need to develop a Europay-MasterCard-VISA (EMV) strategy 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 was another major motivator. Nearly 14% of TMG's clients cite travelers as the primary reason their financial institution is looking to issue EMV cards.
TMG clients undergoing EMV implementation now are pursuing migration to provide a better member/customer experience, particularly for frequently traveling cardholders--according to Brandon Kuehl, product development architect and a leader of TMG's EMV operations team. These cardholders are increasingly reporting difficulty using mag-stripe cards outside the U.S., Kuehl said.
TMG client Alliant CU of Chicago has a significant base of members traveling internationally. It began its EMV migration planning in 2012, said Carolyn Hatten-Kissick, Alliant CU senior manager of operations. The primary driver is the member experience overseas, she added.
"More kiosks and unmanned terminals in international locations are EMV-enabled, creating a significant challenge for mag-stripe cardholders," Hatten-Kissick said. "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 pursue, 59% of credit unions and community banks that have already decided chose chip-and-personal identification numbers. However, many financial institutions are uncertain, with another 35% undecided between chip-and-PIN or chip-and-signature formats. Respondents were split about their plans to pursue dual-interface plastics, meaning their EMV cards will be capable of both contact and contactless payments. Among respondents who have made firm decisions, 45% said their cards would support both forms of payment.
About 37% of respondents said their plan includes migration to EMV cards before October 2015, the month Visa and MasterCard will shift fraud liability to the least secure entity. Another 52% were undecided.
Most undecided financial institutions will shift to EMV before the deadline and firm their implementation strategies within the next 12 months, Kuehl predicted.
To help clients navigate to EMV, TMG is sharing strategies and templates with its clients. The payments processor also is offering an EMV Client Forum, so clients can ask questions of TMG experts and peers. Through the forum, blog posts, webinars and podcasts, TMG also provides updates on industry deadlines, implementation timelines and case studies from like-sized financial institutions.
Cardholder education is a major component to migrating a portfolio to EMV, said TMG. More than 75% of clients said they would appreciate educational support. The company is preparing consumer-facing materials, such as card carriers, inserts, labels and in-branch displays.