White House backing EMV standard
October 23, 2014

While the card networks have been pushing hard to move the United States to the EMV chip standard, progress has been slow. This is in part due to the cost and nature in switching over. With retailers being forced to buy new card readers and point of sale terminals in order to accept credit card payments with the chip, they are slow to adopt to the new policy. It also hasn't helped that the major banks hadn't started distributing EMV debit cards and credit cards to their customers until fairly recently. However, there has been a kick-start to the transition effort being made by the White House.

A helping hand
Until recently, the federal government has been hesitant on intervening over the implementation of the EMV standard. This is the reason why the country has been slow in adopting the new chip. Other countries had adopted EMV through a government mandate, while the federal government has deferred to the tradition of letting the private sector implement the system. However, the White House has decided to join in on the effort through a series of small initiatives.

President Barack Obama signed an executive order to implement EMV on federal government credit and debit cards starting in January 2015. Among the millions of cards that will be distributed include SmartPay commercial credit cards that are used by government workers for a variety of business and travel expenses. More importantly, though, Direct Express prepaid cards for Social Security beneficiaries who do not have a bank account for direct deposit will also have the chip on their cards as well, directly affecting millions of seniors. In addition, as part of the White House's BuySmart Initiative, he mandated that federal facilities that accept debit card payments upgrade their terminals to accept EMV.

While making an announcement at the Consumer Financial Protection Bureau preceding the signing of the executive order, President Obama noted the efforts of several businesses to adopt EMV card readers, including Target and Walgreens. He also noted that the card networks are doing their part to raise awareness for the smart chip standard. However, the announcement did not, as previously rumored by Digital Transactions, mention anything about cards used for federal programs such as the Supplemental Nutrition Assistance Program, also known as food stamps, nor the Special Supplemental Nutrition Program for Women, Infants and Children, also known as WIC. This may be because benefits are distributed by the states, who would have to issue their own rules on cards.

Nexus: G-WEBCD4