Smart cards penetrate US payment market
June 18, 2013

Many small- and medium-sized enterprises that already accept credit card payments at the point of sale are set to accept smart-chip enabled cards. According to Credit Union Times, U.S. financial institutions continue to encourage the adoption of EMV-chip cards. The enhanced plastic is already in widespread use in Europe, but many banks and credit card issuers have been slow to adopt it in the U.S. However, if they do become more mainstream in the states, SMEs that have invested in integrated payment systems will be ready to accept the cards because they have magnetic strips like traditional plastic.

Enhanced plastic on the rise
Credit Union Times stated numerous banks and credit card providers have issued 5,000 EMV-chip embedded cards a day since 2011, correlating to approximately 3.5 million cards currently in use across the country. EMV chips were developed in conjunction by EuroCard, MasterCard and Visa and place the owner's financial information on the chip instead of the strip, which many see as offering additional security benefits. 

Visa said in a statement that the integration of EMV-enabled plastic in the U.S. offers consumers increased security not only at home but abroad, according to Credit Union Times.

"We're very pleased with the progress the U.S. has made over the past two years," the company said. "With each new card, the U.S. payments ecosystem gets one step closer to achieving the improved security that EMV technology affords to consumers, merchants and issuers."

EMV-chip embedded cards are popular in Europe because of a slew of credit card theft occurrences in recent years. Thieves were able to slide a blank card into the payment processing equipment after another consumer had swiped and gain access to the other person's information. However, purchasing platforms in the U.S. have advanced to the point where the chance of this happening is nonexistent. In fact, the EMV cards currently in use across the country still have a magnetic strip, which allows them to be used with payment processing equipment. Because they include a magstrip, financial information is on both the strip and the chip, effectively mooting any benefits the smart card may offer.

Although they are relatively affordable, having an EMV enabled credit card may not be needed, unless U.S. consumers use their cards in Europe. Since the cards have a magstrip, SMEs may still see an increase in the number of consumers reaching for EMV-chip cards at the point of sale because the business can still accept the payment.

Nexus: G-WEBCD2