A View into the Future from the Tipping Point of Payments

By Oliver Manahan, Vice President of Emerging Payments, MasterCard Worldwide, and Chair, Smart Card Alliance Payments Council

In the lifecycle of any technology, there comes a time when the next best thing is usually looming on the horizon, and embracing it is the only smart step to take.  We have reached that point in the U.S., as we look toward a migration to EMV.

The timing is right for this transition.  Consumers are looking for more from their payment devices, including a consistent experience when traveling in the U.S. and abroad.  In an increasingly global and interconnected economy, ensuring worldwide operability is necessary.  With 1.5 billion chip devices globally, EMV is already a proven, scalable technology.

The migration to EMV is a transformational shift that will alter the payments ecosystem the way the iPod transformed the way we listen to music.  EMV-based payments will bring value not just to one party, but to all stakeholders – merchants, acquirers, issuers and consumers.

Since the chip is essentially a mini computer, it has the flexibility and capacity to deliver much more than the static, traditional magnetic stripe.  With EMV, the U.S. market will be able to reinvent and enhance what we can offer – a customized payment device that integrates different parts of the holistic shopping experience.   By leveraging microprocessor technology and dynamic authentication, EMV will greatly reduce counterfeit fraud.  As PIN and other advanced cardholder verification methods are embraced in conjunction with chip, lost and stolen fraud will also be reduced.

The evolution to EMV will not happen overnight.  But we believe that in the long term, EMV will enhance the consumer experience, particularly in the world of e-commerce, and allow them to buy things wherever they want and whenever they want, with the safety and convenience they expect, regardless of the device.

What’s important is that we’re all aligned in our approach to implementation.  We’ve outlined a roadmap that is flexible enough to drive value and ROI for all our businesses individually, but also sets in place a framework and timeline that keeps us moving forward together to deliver value to consumers.

The roadmap is our vision of the future of the U.S. payments ecosystem, and is a framework to upgrade the infrastructure that will serve as the foundation for the next generation of products.  To keep us moving forward, we proposed the formation of an industry-wide coalition to continue to drive the shift to EMV, recognizing that the key to successful migration is collaboration with our partners.  The Smart Card Alliance is one such partner.

From early talks about EMV, the Smart Card Alliance has supported efforts to bring all parties involved in EMV together to collaborate around key topics and to have the right processes in place for success.

We look forward to working with the Smart Card Alliance and others across the industry, as we continue to work as a committed partner for issuers, merchants and acquirers, to help clarify the opportunities that EMV offers and the best path to get there.

Oliver Manahan is a Vice President of Emerging Payments at MasterCard, working closely with customers in defining and executing new payment strategies. He is MasterCard’s Board representative on the Smart Card Alliance and co-chairs its Payments Council.


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