U.S. and Travelers

One of the biggest benefits of the U.S. migrating to EMV is payment interoperability with most of the world.

Market penetration of EMV technology deployment has been growing around the world since 2003, with CAGRs of 43 percent for cards and 48 percent for terminals between 2003 and 2010. Here are the latest numbers as published by EMVCo as of December 2010:

Particularly considering the nearly 100% coverage in the extended Euro zone and soon in Canada, the magnetic stripe technology becomes antiquated.

Tens of millions of U.S. cardholders have been inconvenienced abroad over the last few years by attendants at POS terminals refusing to take their cards and even more by being unable to buy gas at unattended terminals or transportation tickets at ticket machines (and therefore being forced to join the usually long lines at the few remaining - if any - attended ticket booths). U.S. media are more and more frequently covering the issue, not only via the trade press but also in daily newspapers.

The New York Times, for instance, published a feature article in its popular travel section on June 8, 2011 stating: ‘Until businesses change their minds, American travelers will continue to encounter payment issues abroad. The problem is two-fold. Even though most European cash registers are equipped to handle American cards, some cashiers simply don’t know how to process them. And many automated ticket kiosks like those commonly found at train stations, gas pumps and parking garages simply don’t accept cards without a chip and PIN’.

The negative trend vis-à-vis acceptance of magnetic stripe cards will be aggravated by the recent resolution of European banks - at the request of their regulators at the European Central Bank - to eliminate the magnetic stripe from European cards altogether and/or to allow merchants generally to reject magnetic stripe card based transactions. Europeans on the other hand will resort more and more to cash when they come to the U.S. when their debit and credit cards no longer work because of the absence of the magnetic stripe. (http://travel.nytimes.com/2011/07/03/travel/credit-card-problems-abroad-readers-respond.html?ref=practicaltraveler).

To solve this traveler payment problem which would only grow worse, it is an ideal time for the United States to start the move to EMV.

 

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