MasterCard announced that it has developed a roadmap for EMV adoption in the United States. The dual-interface chip technology is already a standard payment type in all other major markets, and the company aims to catch up the U.S. with the rest of the world.
The roadmap, which MasterCard says it will share with customers individually as they go through the EMV adoption process, lays out the elements needed for a successful transition to the global EMV payment standard. Those elements address infrastructure, channels, merchant incentives, security and stakeholder collaboration, according to the company.
However, EMV adoption is not MasterCard's end goal, but a catalyst for future innovation, explains Seth Eisen, senior business leader, U.S. markets communications at MasterCard. "This transformation of the U.S. payments system will be seen in an upgrade of the infrastructure as we make the switch from 'analog to digital' and make investments to drive future innovation, such as integrating loyalty programs and offers into the purchasing experience," he explains. "The continued growth and adoption of mobile payments makes it essential to invest in the next-generation platform today."
Eisen points to a couple of MasterCard's current partnership initiatives as examples as the types of innovations that have the potential to grow with EMV adoption. "We have partnered with Intel to make the e-commerce shopping experience more secure and painless," he says. "And, we’re working with Google, Citi and First Data in the U.S. to deliver Google Wallet, an electronic wallet stored on a mobile phone."
Separate Roadmaps, One Destination
MasterCard isn't the first card scheme to announce such an initiative. Last August, Visa announced its own roadmap to help accelerate EMV adoption in the U.S. Although the two plans share a common goal of EMV adoption and emphasize contactless payments, they differ on a couple of points, according to Randy Vanderhoof, executive director of the Smart Card Alliance, an industry educational organization. "MasterCard has been more explicit that they are including the ATM and e-commerce channels, and are taking a more risk-based approach to security at the point of sale, with merchants and issuers participating in the risk based on levels of security each deploys," he explains.
Eisen adds that MasterCard is not setting down a mandate, but instead is focused on working with customers to deliver EMV. "Issuers and merchants will have the flexibility to manage business and technology decisions to deliver on their individual goals and objectives," he says.
The separate initiatives launched by two different card schemes could be worrisome to industry leaders such as David Porter, general manager of Chase card services at JPMorgan Chase, who said in a recent BS&T article that successful adoption of EMV in the U.S. won't happen until all of the card schemes take a more unified approach. However, the Smart Card Alliance's Vanderhoof asserts that this MasterCard announcement actually is a step toward a more unified approach to EMV adoption in the U.S. "Globally, the payment brands have all unified around the EMV specification, with the industry issuing cards and accepting transactions from all brands in every country migrating to EMV, and all brands participating in EMVCo," he says. "We don’t expect this to be different in the U.S."
While there are no plans for the company to work closely with Visa or other card schemes on a U.S. EMV rollout, Eisen says, "MasterCard understands the balance between providing an aggressive framework to allow the market to move successfully in unison, while providing flexibility for independent strategic decisions."