PURCHASE, N.Y.-Financial institutions got another nudge toward converting their card base to EMV, with MasterCard announcing a deadline for U.S. issuers to either make their ATMs EMV capable or accept fraud liabilities at the teller machine.

MasterCard said the liability shift comes as an expansion of its U.S. electronic payments roadmap to include the ATM channel. The deadline is October 2016. Last fall, MasterCard announced the extension of its existing EMV liability shift program for inter-regional Maestro ATM transactions, effective 2013. The company said its latest move was made as part of its efforts to prevent and manage payments fraud in the U.S.

EMV, also referred to as chip and PIN and chip and signature, is considered more secure than mag-stripe. EMV cards feature a micro-processing chip that stores cardholder data securely, helping reduce the number of fraudulent transactions resulting from counterfeit, lost, or stolen cards. The technology is widely accepted in Europe.

Visa and MasterCard have already taken steps to motivate merchants to install EMV-capable terminals, which will then drive card issuers to adopt EMV (Credit Union Journal, May 7). Visa is requiring all processors to support chip transactions by April 1, 2013. MasterCard is working with acquirers to ensure infrastructure readiness by April 2013. Visa, too, has stated it will shift fraud liability to merchant acquirers by Oct. 1, 2015, if the merchant does not have a chip-card terminal.

Referring to MasterCard's October 2016 ATM compliance deadline, Mike Weitzman, group executive, U.S. Markets, MasterCard, stated that the company is providing issuers, acquirers, and ISOs "flexibility and sufficient time to manage their ATM technology decisions."


Plenty of Time, But...

Bob Tramontano, VP marketing for NCR, Atlanta, agrees that the timetable is sufficient, but urges financial institutions not to wait too long to begin reviewing their ATM infrastructure. "Banks and credit unions must first assess their technology-such as the age of their machines, their card readers, the software running the switch, and processor capabilities. It's a large checklist to go through, to take you from the beginning of the conversion all the way through the final audit process."

Tramontano said NCR has already worked with numerous banks and credit unions overseas and has established a process that works well. "The technology is well known and the software has been tested. The key changes, generally, are a card reader upgrade, a middleware change, and an application change."

Tramontano said the process can be completed, in a flexible environment, in six months or less. He said that in most cases component upgrades are needed and not ATM replacement, and set a wide range of costs due to variables, at $500 to $5,000 per machine.

While there is plenty of time to make the changeover, Tramontano reminded it's best to start early and plan well. "If you don't do a good assessment up front about what it takes to implement this change across your enterprise and may miss a step and that will cost you to go back and do it later."

For info: www.mastercard.com, www.ncr.com, EMV Arriving Ahead of Projections, EMV Conversion 'Vitally Important'

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