MADISON, Wis. (11/13/14)--A new white paper from the CUNA Operations Sales and Service Council explores the many gray areas that surround the fast-developing smart card market.
As U.S. merchants, financial institutions and consumers move ever closer towards the adoption of smart cards, issues of compatibility and cooperation still must be resolved. Discussions within the industry are ongoing, according to the paper "Smart Cards Update."
Some financial institutions are moving ahead with both EMV-chip credit and debit cards, using the common application identify-enabled debit standard. Others are starting with EMV-chip credit cards, while holding off on issuing EMV-chip debit cards.
Meanwhile, continuing point-of-sale data breaches at numerous retailers are moving many card issuers to roll out the smart cards ahead of the liability shift to protect consumer data and to ease customer security concerns. EMV chip-enabled smart card transactions are more secure than traditional magnetic-stripe (mag-stripe) card transactions.
The move to EMV will reduce fraud tremendously, according to Kevin Lanford, director of information technology at $87 million-asset Georgetown (S.C.) Kraft CU.
The paper offers tips for credit unions beginning the EMV rollout process:
For credit unions that have not started the EMV rollout, CO-OP Financial Services said the first step in moving to EMV-chip cards is examining your credit union's business model: "Do you stay ahead of the curve with technology and innovation? Is security increasingly important to you and your membership? Are fraud losses on cards at an all-time high?"
Also credit unions should consider the liability shifts, and the fact that fraudsters move to the easiest targets during transitions.