search trigger icon
search close button


Strategically Speaking
Sep 19, 2012

Author: Paul Miniutti,

According to a June, 2012 ATM industry survey, performed by the ATMIA, over 90% of respondents understood EMV poorly or only moderately well. Less than 10% understand MasterCard’s Point of Interaction Roadmap and only 25% knew the approximate costs of EMV ATM migration.

EMV stands for Europay, MasterCard and Visa.  It is a global standard for credit and debit payment cards based on chip card technology. The standard covers the processing of credit and debit card payments using a card that contains a microprocessor chip at a payment terminal or an ATM.  EMV cards, or chip cards, are much more secure than traditional magnetic strip debit and credit cards.  Conventional cards use a magnetic strip where the user data is encoded and the card must carry the owner’s signature. EMV cards on the other hand provide added security through the use of a PIN (Personal Identification Number) number in combination with cryptographic algorithms. This increase in security has proven to greatly reduce the amount of credit, debit, and ATM card fraud.

The Aite Group reports that card fraud costs to the U.S. card payments industry are an estimated $8.6 billion per year, and according to The Nilson Report, that figure is expected to reach $10 billion by 2015.  Adoption of the EMV card is expected to dramatically reduce fraud.

The MasterCard Point of Interaction Roadmap is a comprehensive roadmap focused on advancing the U.S. electronic payments system. Elements of the MasterCard roadmap include:

EMV – Solidifying EMV as the foundation of the next generation of payments

Immediate focus on acquirer infrastructure – Working with acquirers to ensure infrastructure readiness by April 2013

Encouraging greater security and cardholder verification – Providing consumers with greater control and to reduce fraudulent transactions

Provide benefits for merchant terminalization – Providing true financial benefits for merchants as they implement EMV-compatible terminals

Cover all channels – Addressing all touch points where consumers will interact with MasterCard, including ATMs, the physical point-of-sale, online and mobile commerce

Commitment to leadership and collaboration – Fostering industry collaboration to deliver the next generation of payments into the U.S. marketplace

Aite reports that upgrading to the new EMV hardware is expected to cost between $2,000 and $4,000 per machine.   Other estimates put that cost much higher.  No doubt EMV will be an enormous capital expenditure for operators, perhaps eclipsing ADA compliance expenses.  Upgrading a standalone terminal will, in all likelihood, cost thousands of dollars per unit.

One key component of the MasterCard Roadmap is the shift in liability.  Liability, in the event of fraud, will shift from the card issuers to whichever party in the payment chain is not EMV compliant.  MasterCard just announced this shift in liability will apply to the ATM Channel in October of 2016.  VISA is expected to issue a similar announcement. 

3DES, Image Capture, ADA and now EMV continue the challenge of operating a successful ATM Channel.

Have you started putting your EMV ATM Channel migration plan in place?


subscribe to our blog

Stay up to date with the latest people-inspired innovation at Jack Henry.

blog subscription image
floating background gradient

contact us

Learn more about people-inspired innovation at Jack Henry.