EMV – Training the Public

(Note: This is the first of a two-part series. Look for the second installment in the next week)

Since Visa’s EMV announcement last summer and MasterCard’s somewhat contrary/somewhat complementary announcement very recently, there’s been a lot of talk about EMV. When will it really be viable? What forms will it take (i.e., Chip and “X”)? Will merchants really make the change?

One of the least discussed, but just as important questions is, “How do we get people to start using it?”

Industry groups and merchants alike agree that a government mandate to switch over to EMV is the least attractive option – the most attractive option being that the industry as a whole makes the push without a government mandate. Barring a mandate, any efforts to convert existing magstripe users over to new Chip and “X” cards will be driven by a number of factors:

1. Card availability. How quickly and widely Issuers make the cards available (plus any incentive programs)
2. POS or payment system compatibility. This issue will be at least partially settled thanks to Visa and MasterCard shifting the liability back to those merchants not accepting EMV transactions.
3. Comfort level of users. Americans have been using their magstripe credit cards for decades—heavily. Swiping a card is almost an automated response requiring only as much effort as it takes to figure out whether to hand the card over to the clerk, or swipe it yourself and sign your name.

This last factor—Comfort level—is going to be challenged by EMV. For one, the interface will be different. Rather than swiping your card, you will either tap it, activating its RFID mechanism, or insert it into the payment device.

It’s here where it gets tricky for the uninitiated.

Unlike magstripe transactions where you can swipe your card and immediately put it in your pocket, an EMV contact transaction requires that the card remain inside the reader for the duration of the transaction. This is a stark departure from magstripe transactions where all the processing occurs post-swipe. Couple this with the requirement for cardholders to actually learn their PIN, rather than throwing it away with their card activation and privacy statement, and you have some very real concerns.

The question comes up then, how do we retrain people on using their credit and debit cards? And for that, we have plenty of EMV pioneers to look to for help.
When the UK decided to mandate the move to an EMV payments infrastructure, they built an entire awareness campaign around this simple statement:

It’s short. It’s simple. It’s almost a mantra.

To reinforce the thought, and no-doubt soften the mandate blow, they designated February 14, 2006 as “PIN Day,” the final stage of the cutover at which point all card-accepting merchants had to be capable of accepting EMV transactions (barring some exceptions).

They also issued a series of educational pubs such as the “Survival Guide For The Chip and PIN Changeover” along with educational PSAs (via press releases) leading up to PIN day, all geared at informing and retraining the public on the EMV change.

Did it work? It kind of had to. Still, the UK has been a model for EMV success, today enjoying a 92% Chip and PIN card deployment base and a 24% reduction in card fraud.

It is unlikely we will see the same kind of nationwide campaign in the U.S., but what the UK changeover illustrates is the importance of education. We can’t simply issue new Chip and PIN cards, replace existing payment devices with new ones and expect the average shopper to know what to do. Nor can we expect a similar level of expertise, right off the bat, from store clerks responsible for keeping the lines moving during hectic shopping hours. There will be challenges early on and one way to help ameliorate any adverse reactions is with preventative, proactive education.

The responsibility is on all of us—Issuers, hardware vendors, merchants—to make sure that the cutover is a relatively painless one for everyone involved.

For more information on the UKs EMV planning, click here.

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