Driving EMV adoption: the benefit for banks1
According to recent reports from Visa, EMV deployment in the US is accelerating. An estimated one million Visa-branded EMV chip-enabled cards had been issued by the end of 2011. In addition to this, Mastercard has finally agreed to join Visa in supporting the technology in the US. EMV, which regular readers by now know stands for Europay, MasterCard and Visa, is used widely in countries globally. More importantly in our view, and from a bank’s perspective, it uses an embedded microchip to validate the card, the consumer and the payment transaction, which helps to reduce fraud.
So, rolling out EMV gives banks huge opportunities to reconnect with their customers and embrace technologies for a smoother, more secure and convenient interaction with their credit cards. There are challenges to overcome, however, which instant issuance such as our Dexxis EMV instant issuance solution – just recently launched in-branch for US banks – can facilitate.
For instance, many cards sent by mail are never activated and some are lost or just not delivered. This represents both loss and missed opportunities for banks. In Saudia Arabia for example, banks have had to use expensive courier services such as DHL to deliver credit cards which instant issuance can avoid. Which one of Saudi Arabia’s leading banks, Al Rajhi, has taken steps to change, by completing the deployment of on-the-spot EMV card issuance, issuing up to 15,000 cards each day to its customers across the region. The main attraction of Al Rajhi’s offering for its customers is that they can enter any one of more than 500 branches across the country and leave a matter of minutes later with a brand new EMV card. For the bank, this not only means significant savings on postage and activation, but crucially it negates the security risk associated with delivering cards to customers. By placing the new card directly into the hand of the customer, the risk of it being lost or intercepted is zero.
So this new system increases security on two levels. Firstly, the solution being issued (the EMV card) is more secure than traditional mag-stripe technology, as it negates the risk of card-skimming and other common forms of card fraud. And secondly, the means by which it is issued is infinitely safer than posting new cards and PIN numbers.
As well as reducing the amount of fraud, banks also stand to benefit from making their card ‘top-of-wallet’ or first choice by emphasizing the enhanced features with instant issuance leading to increased transactions. Given American consumers in 2009 had an average of 5.4 cards in their wallets according to an Experian marketing insight snapshot, ensuring the customer relationship is key to retaining the custom.
Our instant issuance solution is robust and scalable as demonstrated by the capacity announced by Al Rajhi bank. EMV may not yet be a US-wide standard, but with such efficient technology for its issuance now in place, it would seem only a matter of time before it becomes so.