How will the U.S. benefit from EMV migration? Look to Canada

Last updated: 19 March 2014

As the U.S. continues its implementation of EMV chip cards, it’s lucky to be able to look to other countries that have adopted the technology for best practices, lessons learned, and future benefits. As a Gemalto employee based in the U.S., I’ve been eagerly watching to see how our neighbor to the north, Canada, is benefiting from their EMV chip implementation, which started in earnest in 2007.

Interac Association recently gave updates on the reduction in debit card fraud losses due to EMV in Canada. Debit card fraud losses from skimming are at their lowest level since 2003. The losses have fallen to $38.5 million in 2012 from a high of $142 million in 2009. This large decline in skimming in Canada is owed to the country’s adoption of EMV chip cards. The secure chip inside of the card, which holds cardholder details, is impervious to access by skimmers or any other unauthorized parties. And, even if the information on the card could be accessed, it cannot be duplicated and used on another card: EMV transactions can only be conducted with the genuine card. This is because the card holds encryption keys that generate unique dynamic data that changes for every transaction, and that the bank verifies every time the card is used.

While we’ve seen similar reductions in card fraud losses in other countries that have adopted EMV, like the UK, these new stats from Interac show that the business benefits apply to North America as well.

Not surprisingly, as the rest of the world has migrated to EMV chip technology, some fraud has shifted over to the United States because of the ease with which fraudsters can duplicate magnetic stripe cards. As a result, the U.S. has carried a disproportionate percentage of global fraud losses – until now. Through our adoption of EMV chips, we’re anticipating a reduction in fraud loss like in Canada, the UK and the 80 other countries in various phases of migration.

Reduced fraud isn’t the only thing we have to look forward to in the U.S. with our EMV chip implementation. With point-of-sale terminals that are able to accept contactless EMV cards, consumers will begin to see an increase in mobile payments with NFC. Canada is, again, a great example. With Canadian telecommunications carrier TELUS, moving ahead with implementing EMV chip technology in secure NFC-enabled mobile devices, consumers will soon be able to make secure payments, participate in loyalty programs, validate their transit pass, and redeem coupons using the secure credentials stored on their SIM cards.

Heightened security and more convenient payments are just a few of the reasons why the U.S. has so much to gain from its migration to EMV. Do you have any questions about EMV migration in the U.S., or any thoughts on EMV in your country? Let us know in the comments section below.