The move to EMV (Europay, MasterCard, Visa) chip smartcards should greatly aid in point-of-sale fraud reduction.
But preparing for the conversion from magnetic stripe cards has its share of challenges, according to “Smart Cards Update: Where Do We Go from Here?”, a white paper from the CUNA Operations, Sales, and Service Council.
“Credit unions are always looking for ways to limit fraud, and this is one of the best ways,” the whitepaper reports. “The rest of the developed countries in the world are on chip-and-PIN technology, and the U.S. is behind.”
According to “Smart Cards Update,” credit unions should:
1. Become familiar with the product and technology and how members use their plastic.
2. Ensure your card vendor has a clear roadmap and understanding of how to support and manage EMV technology
3. Explain clearly through staff and member communications how EMV chip cards work differently at merchants that use the chip technology versus those that don’t.
4. Consider whether you can roll out EMV as part of an implementation wave. There are opportunities to share costs and resources with other credit unions going through the same transition.
5. Be aware of required testing. For example, MasterCard issuers must run specific M/Chip certification tests. Understanding these specific requirements can make the planning and transitions easier.
6. Consider your membership. If members are tech-savvy and a significant percentage travel or live overseas, those might be the card accounts to convert first.
7. Transition slowly. If you identify the need for EMV but aren’t committed to full migration, there might be alternatives, such as starting with a smaller group of members as a test group, EMV-enabled prepaid travel cards, or new card issuances and then transitioning existing accounts.
8. Create a business plan. The cost of EMV can be significant in time and money, so budget accordingly.
Beyond fraud-prevention, examine additional benefits and returns on investment, intangible upgrades, and efficiencies throughout the migration.
9. Calculate the timeframe. Be flexible: Changes may be required as the technology changes to fit the U.S. market. Make sure terminal and network routing issues are resolved before moving forward.
10. Get the right people to lead the charge. Ensure open communication channels by enlisting change champions and leaders to help make the implementation as seamless as possible.
11. Personalize the process. Engage your card services team throughout the implementation, asking for their feedback and questions. Collaborate. Engage multifunction committees or teams to ensure proper coverage.
12. Educate the entire team. Product knowledge is crucial. Everyone—from board members to tellers and back-office staff—must understand the product, process, and timeline. The more information you can give everyone, the better.
13. Communicate. Once you have a strategy, communicate it to staff and members. Tell them whether EMV is on the way, how you’ll transition, and whether the credit union will provide options such as EMV chip prepaid cards.
14. Be confident in your decision. Whether your credit union chooses to move ahead or delay, make sure the decision is right for you.
Also, realize that your credit union is not alone. “Other credit unions are in the same place, and others are ahead of and behind them,” according to the report. “Reach out to others and learn from your peers. The great thing about credit unions is their willingness to help each other.”