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EMV and Transit Chip Payment Gaining Momentum in U.S.
PRINCETON JUNCTION, NJ, Mar 01, 2010 (MARKETWIRE via COMTEX) --
Contactless payment is now the de facto standard for U.S. transit
fare collection systems, and will likely become a principal market
driver for the expansion of bank-issued contactless cards. But that
is just one of many factors building interest in the United States
around chip cards for payments, according to experts presenting at
the Smart Card 3rd Annual Payments Summit. The event was held
February 23rd - 25th, 2010 in Salt Lake City, Utah.
Contactless in Transit
Contactless fare systems installed by U.S. transit operators will
help pave the way for broader contactless acceptance here and
elsewhere in the world.
-- Charlie Craven, vice president, American Express: "Transit can be a
great help to drive acceptance of contactless around the world. Daily
use of the cards in transit will help consumers understand the benefits
of contactless." He also cited an American Express study that showed
there are 118 contactless or mobile pilots worldwide.
-- Des Docherty, vice president, Visa, pointed out that in New York City
all 13,000 taxicabs accept contactless and over the next few years all
of the MTA buses and transit systems will too, concluding: "If I'm a
merchant within that footprint, doesn't it make sense for me now to
start implementing?"
-- Oliver Manahan, vice president, MasterCard: "We have 12 U.S. airports
deploying contactless PayPass acceptance." MasterCard has issued 70
million PayPass cards worldwide, most of them in the U.S.
Representatives from transit agencies in Toronto, Philadelphia, Los
Angeles, Utah, San Francisco Bay Area, and New York City reported on
their current contactless fare collection systems and plans. Steve
Frazzini, chief officer of AFC program management, New York City
Transit, reported that an expanded open payments pilot that will
include New York City Transit, PATH and New Jersey transit is
targeted to start mid-year and will include a service area that
includes 1.4 million riders.
Mobile Payments
Mobile payments are very exciting to everyone, including retailers,
and is regarded as another important driver that will continue
expanding the contactless market. Retailers are motivated by the
other mobile applications that complement mobile payment such as
coupons, loyalty programs and location-based services that drive
people into their locations.
-- Mohammad Khan, ViVOTech: "The Holy Grail will be when tens of millions
of NFC mobile phones show up in the U.S. The whole industry will move
then. That won't happen over the next 12 months, but it will absolutely
happen over the next 36 months."
-- Jennifer Garcia, Discover Financial Services, reported on the successful
test of Discover Zip contactless stickers and said there's no reason to
wait for NFC phones: "Our pilot confirmed stickers are a simple and easy
bridge solution to the NFC logjam."
-- Dave Wentker, head of proximity payments, Visa: "The future of NFC is
bright."
International Traveler EMV Card
Several industry experts predicted that the next U.S. chip-based bank
card would be an EMV card for international travelers who
increasingly find situations where they cannot use their magnetic
stripe card when abroad, particularly in Europe.
Merchant Acceptance
Merchant acceptance of contactless cards today, and their
receptiveness to eventually using chip cards for security reasons,
were actively discussed topics in several sessions.
Dodd Roberts, president of the Merchant Advisory Group (MAG), an
organization of large U.S. retailers, made a strongly reasoned call
to action for all of the stakeholders to sit together and finalize a
strategy. Focusing on security, Roberts argued that retailers are
willing to invest, but what is holding them back is confidence in a
technology roadmap that has an end point agreed upon by all the
stakeholders.
Putting up a slide that showed a winding U.S. payment technology path
that included end-to-end encryption, tokenization, contactless and
EMV technology, Roberts said, "You have merchants out here on this
road and everyone is in different places and trying to figure out
what they invest in, why and when."
When asked what it would take to get retailers on board, Roberts
answered, "If I'm that retailer, I know at some point in the future I
have to invest to be EMV capable. I see that as a foregone
conclusion. To move that up in my timeline, I'd need to know everyone
is on board -- here's the timeline, here's the roadmap, here's where
you are going and here's the date."
Roberts drew parallels to the Program Management Office established
by all of the stakeholders in Canada as they planned their migration
to EMV. He said it's a good idea to establish something like that in
the U.S., and invited all of the other stakeholders to come together
and agree on one plan.
One reason for the step approach was presented succinctly by Robert
Carr, CEO of Heartland Payments Systems. Though fully supportive of
EMV as the ultimate end point, he argued that the industry can't get
there fast enough, pointing out that Canada's 'fast' EMV
implementation took eight years.
Carr has worked toward the goal of making Heartland the most secure
payment processor in the world, and has moved toward end-to-end
encryption because it is a solution that his company could get to
market quickly and unilaterally, though they have tried to make it a
standard.
Carr also worked to foster information sharing on attack vectors used
by criminals through a new organization he helped to create, the
Payments Processing Information Sharing Council. In the past, this
information was not shared in the industry, and created a situation
where criminals could repeat the same attacks on different
organizations. In Carr's view, being secure should be a competitive
advantage, but knowing how criminals are attacking the industry
should not be.
The Payments Summit brings together members of the Smart Card
Alliance's Contactless and Mobile Payments Council and Transportation
Council. These councils include representatives from transportation
authorities, issuing banks and payment brands, retailers, mobile
technology suppliers, chip and card manufacturers, terminal
manufacturers, payments processors, and transit and payment systems
integrators.
About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry
association working to stimulate the understanding, adoption, use and
widespread application of smart card technology.
Through specific projects such as education programs, market
research, advocacy, industry relations and open forums, the Alliance
keeps its members connected to industry leaders and innovative
thought. The Alliance is the single industry voice for smart cards,
leading industry discussion on the impact and value of smart cards in
the U.S. and Latin America. The Smart Card Alliance also offers the
Leadership, Education and Advancement Program (LEAP) and Certified
Smart Card Industry Professional (CSCIP) program for individuals who
are involved in the smart card industry. For more information please
visit http://www.smartcardalliance.org.
Contact:
Deb Montner
Montner & Associates
203-226-9290
dmontner@montner.com
SOURCE: The Smart Card Alliance
mailto:dmontner@montner.com
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