|EMV MAINSTREAM IN 2 YEARS; NFC likely to drive adoption of dual-interface terminals|
Now that EMV standards-in use in all other industrialized countries around the world-are finally coming to the United States, a new report by Javelin Strategy & Research forecasts 60% of terminals in the United States will be EMV-capable by October 2015.
Globally, an estimated 76% of terminals and 45% of cards are EMV-enabled, yet the United States has lagged behind with only 10% of terminals deployed and less than 1% EMV card adoption.
But the development of mobile payments technologies has provided the impetus to drive EMV. The potential of mobile payments based on NFC-Javelin's pick as the likely most successful mobile payments technology for the long-term-provides a powerful justification for merchants to invest in dual-interface EMV terminals that support contactless NFC transactions and NFC-based mobile wallets.
"Javelin believes that NFC will ultimately be the leading technology underlying mobile wallet solutions, and implementing the EMV standards will facilitate that," says Beth Robertshon, director of payments research at Javelin. "Apple made a near-term choice not to include NFC in the latest iPhone release, as EMV terminals are not widely in place in the U.S. market at this time. But we believe the network incentives for merchant conversion to EMV and NFC-ready terminals are largely in place, and this will ultimately bring Apple to enabling NFC within its mobile devices."
The potential to reduce the fraud associated with card transactions is the other significant driver for EMV conversion, but one that has left the United States, with its relatively low fraud rates, less interested in supporting the expense of EMV conversion. But Javelin believes that the mobile device offers the ability to also drive down credit card fraud when the card is not present. This opportunity enhances the value proposition of mobile in combination with NFC.
[This article was posted on October 22, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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