Magazine article American Banker

EMV Gets a Push from Fed Banks, Industry Groups

Magazine article American Banker

EMV Gets a Push from Fed Banks, Industry Groups

Article excerpt

Byline: Michael Sisk

If the U.S. government could mandate the switch to digital TV, why can't it mandate that credit and debit card issuers switch from magnetic stripe cards to the EMV Integrated Circuit Card Specifications to improve security?

Richard Oliver, an executive vice president with the Federal Reserve Bank of Atlanta's Retail Payments Forum, has posed that question, arguing that the growing security vulnerabilities posed by magnetic stripe cards could warrant policy action by the government.

Oliver is leading a series of meetings organized by the Boston and Atlanta Federal Reserve banks that include about 30 companies and industry groups to discuss the future of payments in the U.S., which is far behind Europe and Japan's adoption of the chip-and-PIN technologies included in EMV standards.

The forum has met three times and is scheduled to meet again this fall; the goal is to issue a white paper at yearend. If Oliver's statement is any indication, the group is likely to argue for the adoption of EMV in the U.S.

"The Fed decided it should understand more of what's going on in the mobile marketplace, who's involved and what role the Fed should play," said forum member Lisa Stanton, the executive director for global alliances at the mobile banking software vendor MonitiseAmericas LLC, a Providence, R.I., joint venture of Fidelity National Information Services Inc. and the London technology vendor Monitise PLC.

The big question forum members are asking, Stanton said, is whether the current payment system is really broken enough to justify the cost of fixing it.

Cost isn't a small issue. The Smartcard Alliance estimates that 6 million merchant devices would need to be replaced or upgraded to accept EMV cards, with the bulk of the costs falling on merchants. …

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