Build It, And They Will Come¬ Mobile Payments Drive EMV

Oct 11, 2012

Build It, And They Will Come¬ Mobile Payments Drive EMV


Javelin Presents Business Strategy and Requirements for EMV Rollout in the United States

San Francisco, CA, October 11, 2012 – 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 U.S. will be EMV-capable by October 2015. As a follow-on to its Battle for Control of Mobile Wallet report, Javelin examines key market forces that will drive EMV adoption, including mobile payments, EMV’s support of near field communication (NFC) technology, and the potential to incorporate mobile technology to reduce card-not-present (CNP) fraud.

Globally, an estimated 76% of terminals and 45% of cards are EMV‐enabled, yet the U.S. 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,” said Beth Robertson, CCM, 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 U.S., 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.

Based on interviews with leading industry stakeholders and on extensive secondary research and analysis, Javelin’s EMV: Moving Toward Ubiquity report presents a comprehensive assessment of the planned U.S. conversion to the EMV standard,

The report considers the impact of mobile payments and near field communication (NFC), deliberates resolution of the PIN versus signature debate, and evaluates factors that will influence terminal and card portfolio conversion to the EMV standard. The report presents a business strategy and requirements approach to EMV rollout and suggests specific segmentation approaches that issuers can use to manage the costs and time lines of portfolio conversion. The report contains 27 pages and 11 graphics.

Learn More: EMV: Moving Toward Ubiquity

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About Javelin Strategy & Research
Javelin Strategy & Research provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. Javelin’s independent insights result from a uniquely rigorous three-dimensional research process that assesses customers, providers, and the transactions ecosystem.

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