Smart Card

MasterCard and Visa have indicated October, 2015 as the timeline for the big shift from swipe and sign credit cards to EMV or smart cards requiring a PIN. The EMV system comes out of an early 1990’s joint project by international payment processors to set standards for smart-card specifications. Most of the world has already adapted this process, but the US is slow to make the transition.
Why has this taken so long? In 2003, Clear Technology was helping a payment processor issue bank smart-cards across much of Eastern Europe and Africa. The cards were in high demand and the processor was under pressure to cut the time from card program request to issuance. More than 10 years has passed and little has changed in the US. There are 3 primary reasons for this. Embedded infrastructure in the old system is a huge drag on new investment. In addition, there is limited need for offline transaction processing. Finally, the main reason is a misunderstanding of the increasing risk to banks and merchants under the old system. How costly is it for a big brand to expose millions of customers to identity theft?
It’s ironic that the main driver of smart-card adoption in many markets was the high rate of fraud. Fraud which predictably has migrated to the US as the smart-card systems made it more and more difficult to succeed in less developed economies.
Transition won’t happen quickly as the road maps issued in 2012 by both Visa and MasterCard show. How many more multiple million ID thefts will occur before 10/15?