EMV: Broader Trend Toward Security and Mobility

EMV technology is fast becoming the standard, and organizations in every industry need to take note - and action.

The deadline for merchants and card issuers to embrace and support EMV is October 1 of this year. At that time, firms that have failed to make the upgrade will be liable for any fraud that occurs due to their continued reliance on magnetic-stripe card transactions.

This move toward EMV is widely portrayed as a needed - and arguably overdue - effort to improve the security of payments in the U.S. And this is a fair description. However, it is also important to see this development as part of a broader trend toward greater security and mobility in the payments sector. For businesses to keep pace with their competitors and industry trends, they will need to go beyond basic EMV support, especially when it comes to mobile payments.

Understanding EMV
EMV, which stands for "Europay, MasterCard and Visa," refers to the introduction of credit cards featuring chips. These chips are much more secure than credit cards' traditional magnetic stripes, as they cannot be easily replicated by criminals. As the Electronics Transactions Association explained, each purchase with an EMV card creates a unique code sequence.

EMV's unique code creation adds security to transactions.EMV's unique code creation adds security to transactions.

Starting in October, any merchant that does not accept EMV cards will be held liable for credit card fraud that takes advantage of magnetic stripes. Considering the stakes involved, this is a huge concern for many companies. Notably, Target dedicated approximately $100 million toward ensuring that all of its stores would have EMV-enabled technology in place before the deadline. This effort included upgrading its store card readers and developing and distributing REDcards featuring smart chips.

Obviously, upgrading its payment technology was particularly important for Target, given its infamous 2013 data breach. This breach, which affected as many as 70 million customers, had a major impact on the company and its reputation. While the stakes for achieving EMV compliance may not be quite so high for those companies that have not experienced such widely-covered security incidents, there's no denying the importance of avoiding the type of negative publicity a payment-related data breach inevitably brings.

SMB issues
EMV adoption is imperative not just for enterprise-level companies, but also for small to medium-sized businesses. Unfortunately, many of these smaller firms have not yet taken steps to comply with the October 1 deadline, and a significant number of these will certainly be exposed to liability in the months that follow, as Big Commerce Blog contributor Megan Conley noted recently. She explained that many SMB owners and leaders see the cost of upgrading as too great to warrant the effort, while others simply fail to appreciate the severity of the issue.

"Consumers are more concerned with security than ever before."

However, Conley emphasized that EMV capabilities, and payment security in general, should be seen as critical components of customer support, especially in an increasingly omnichannel retail sector. She asserted that consumers are more concerned with data security than ever before, and will not remain loyal to firms of any size that do not put forth the effort needed to keep their customers' sensitive information safe and protected.

Beyond EMV
In this way, EMV fits into the broader trend toward not just payment security, but also greater consumer demands in the payments sector, as Payments Source contributor Thiago Olson recently asserted. He explained that the long-term implications of EMV's arrival are more consequential than its immediate benefits.

"What is most significant about EMV is not actually EMV chipped cards as is currently being implemented, but the groundwork EMV has laid for a more robust, adaptable payment infrastructure that will continue to evolve over time," Olson wrote.

Most notably, Olson pointed to contactless NFC payment options, such as Apple Pay, Android Pay and Samsung Pay. He explained that card networks are eager to work with technology companies to encourage innovation in this realm, all while ensuring that consumers enjoy a secure, convenient experience.

"Card networks are eager to work with technology companies to encourage innovation."

The writer went on to emphasize that the payment sector in general is evolving quickly, and that the rise of EMV cards is an overdue development in this capacity. More changes are likely on the way.

Innovation needed
Given this state of affairs, the question that business leaders must answer is how they are going to survive and thrive in the fast-evolving world of payment innovation.

One of the best ways to move forward in this capacity is by embracing mobile payment apps. Consumers are increasingly comfortable with the idea of using their smartphones to make payments, and those companies that can offer this service will have a significant competitive advantage over their rivals. However, as with traditional payments, security needs to be a top-level priority. Retailers need to ensure their apps can maximize data protection throughout every aspect of the payment process.

By making EMV adoption part of a broader push toward more reliable, advanced payment options, businesses will be well-positioned not just now, but for years to come.