Just a few days ago we gave a brief overview of what EMV chip card technology is. With the payment technology firmly in place in almost every other region than the U.S. the only next step is to bring it stateside. Today news was released that the very first EMV enabled ATM machines are operational in the United States. The ATMs that are currently live are located at a bank branch on Park Avenue in New York City.
The more secure technology has been long tested in Europe as it has been in service in most of the continent since the late 1990s. According to one industry source, 36 percent of all bankcards and 65 percent of terminals, ATMs and other machines globally are EMV compatible. Also, since France adopted the EMV standard (and was the first country to do so) there has been a reported 80 percent reduction in credit card fraud.
Why a U.S. Rollout is More Complex
Many consider the U.S. payment industry to be one of, if not the most, complex in the world. This is due to several factors. For one, we lack the presence of a one central authority when it comes to issuing deadlines for implementation to issuing banks. In addition to this, there are a greater number of card issuers here, which increases the “moving parts” of a national overhaul.
Much of the decision making process lies with the issuing banks and credit unions. While they understand the importance of upgrading the existing infrastructure, decisions on scope and capabilities must be made and a roadmap for rollout designed.
ATM Specific Factors to Consider
ATM owners and operators have a few things to consider when deciding to upgrade or not. Because the liability of fraud and noncompliance rest on the operators of each machine the best route would be to analyze the number and type of transactions at each location. There are then three options:
- Upgrade or replace the machine with EMV capability
- Don’t upgrade and risk the chance of fraud or noncompliance
- Take the machine out of service
Obviously most operators would like to keep as many locations operating to maintain revenue but it is possible that some locations just have too low of traffic to be worth upgrading or might be located in higher risk areas.