EMV technology has been mandated for the US market since October 1, 2015. It was a necessary change. Fighting hackers and thieves with security technology from the 1960’s in the 2000’s was a losing battle.
Through a variety of methods, hackers were able to steal millions of peoples credit card information. This stolen information was then sold to other criminals on the internet part called the “dark web”. These criminals then would use this information to either make counterfeit cards or make fraudulent purchases online. The vulnerability of the traditional credit card, the mag stripe card, being stolen came to the public’s attention in 2013 when 40 million people’s information was stolen from Target.
Breach after breach from companies all over the US soon followed the Target hacking. This cost the banking industry billions and facilitated the move faster from the mag stripe card to the EMV smart chip card. The EMV smart chip card uses a complicated algorithm that changes the pertinent information of the card holders personal stats each time it is used making it almost impossible to steal.
In an effort to facilitate this change faster and encourage more wide spread use of the EMV cards, banks and the processors set a date of October 1, 2015 to mandate the use of the EMV cards.
The problem with this mandate, was it was mandated by banks and processing companies and not necessarily a US government lawful mandate. This means you had private/publicly traded companies that were telling the American public and merchants what to do. The roll out was not smooth. What was discovered, is the companies that were pushing for this mandate, were not speaking with each other. Each had their own program, and of course their program did not work with the other company’s programs. Terminals did not work with new software; processing companies did not have enough new processing terminals to fulfill the demand. Software techs programming these terminals were overwhelmed and it was taking upwards of 6 weeks to update terminals.
Even with these issues, both Visa and Mastercard are reporting about a 49% compliance for merchants across the US. Chip card issuance is higher with over 90% compliance by the big banks. The rollout has been slow and painful, but reports have shown that in-store fraud has decreased dramatically in the last 18 months. This means the mandate is working but it will take another 48 months to become fully implemented across the country.