Will European ATM fraud decrease finally push EMV in the US?

Last updated: 23 August 2017

A Cardline report that ATM fraud dropped 14% in Europe in 2010 got me thinking that maybe the US would wake up to the advantages of EMV.  The data comes from the European ATM Security Team Ltd. who gathered data from 22 European countries.

“The continuing drop in fraud losses is very good news for both cardholders and the industry, and indicates that the significant investment made by the European banking sector into EMV technology, as well as into anti-skimming devices at ATMs, is now really starting to pay off.” — Lachlan Gunn, European ATM Security Team

The organization estimates that there were over 398 000 ATMs in Europe at the end of 2010 and that 96.7% of them are EMV-compliant.

Will the US be wanting to adopt EMV now? Unfortunately, the answer is “Probably not for fraud reduction,” if the past is any indication. Experts routinely cite the fact that merchants would have to invest in new terminals, and without a shift in liability or some kind of motivation from banks, this simply won’t happen. But this week two large US banks, JPMorgan Chase and Wells Fargo, announced that they would begin offering EMV cards to their US customers this summer. The reason? To avoid problems using their magnetic stripe cards internationally.

The 398 000 ATMs in Europe will all read magnetic stripe cards, but it is in other places like parking garages and gas stations in Europe where Americans have problems with their non-chip cards.

So reducing fraud costs isn’t a motivator, but lost payment opportunities is.

Most analysts cited in the article don’t believe that this heralds any kind of move in the US to wider use of EMV. In fact a Chase representative flatly states “We’re not looking to the future necessarily here”.

Where are they looking? To the present, and to their international travelers. Chase is offering EMV on their Palladium credit card for private, investment, treasury and commercial bank clients. Wells-Fargo is targeting frequent international travelers. Not exactly your average American who might be shopping at Wal-Mart, one of the largest retailers to install EMV-compliant terminals. In fact, recent estimates indicate that only 37% of Americans even have a passport and how many of those are frequent international travelers?

Still, having two large banks in the US begin issuing EMV cards, even in small quantities,  is good news for combating fraud which ultimately costs everyone.