Data published by EMVCo shows that at the end of 2020, 10.8 billion EMV® chip cards were in global circulation – an increase of nearly 1 billion compared to the previous twelve months. In addition, EMVCo reports that 66% of issued cards are EMV, with over 86% of all card-present transactions conducted globally using EMV chip technology. In this Q&A post, Junya Tanaka, EMVCo Executive Committee Chair, explains the role of EMV chip in supporting the delivery of reliable and convenient payments globally.
Firstly, why is surpassing 10 billion cards a significant milestone?
The fact there are nearly 11 billion EMV cards deployed worldwide clearly reflects the benefits that EMV chip offers to merchants, acquirers, card issuers, businesses and consumers through improved transaction security, reduced counterfeit cards and fraud, and a consistent payment experience.
And to really appreciate the significance of this milestone, it is important to recognise that EMV chip technology benefits from a network effect. Higher deployment and adoption of EMV chip technology reduce the points of weakness that fraudsters can exploit, while increasing consistency and familiarity for consumers and merchants, which in turn creates greater confidence in the technology.
EMVCo data showed an increase of nearly 1 billion cards in global circulation by the end of 2020 compared to the previous 12 months. Was this due to the pandemic?
The role card payments play in facilitating global commerce has been brought into sharp focus over the past 12 to 18 months, as consumers and businesses of all sizes have increasingly shifted away from cash.
But we should be mindful that correlation does not equal causation. In fact, the pandemic has had a limited impact on these figures. Deploying EMV chip technology is a strategic decision that takes time to plan and implement. This means that most countries had already migrated to EMV, or were in the process of doing so, before the pandemic struck.
What is clear, however, is that contactless transactions have increased rapidly across the world as part of a broader shift towards touchless payments – a trend facilitated in many marketplaces by the large number of EMV chip cards deployed that are contactless-enabled.
How does the deployment and adoption of EMV chip vary across the world?
We are continuing to see exceptionally high adoption in mature markets such as Europe, where EMV chip has been deployed for over 15 years, with Africa and the Middle East not far behind. Elsewhere, there have been significant increases in both EMV chip issuance and adoption in Asia-Pacific and the United States as respective migrations gather pace in moving towards maturity.
You mentioned that EMV chip is increasingly mature. But does this mean it is also becoming outdated?
Not at all. Although we are undoubtedly seeing rapid advances across payments both in-store and online (which is to be welcomed), EMV chip remains a highly popular, trusted payment method. EMV chip is not static either, and continuing to evolve the specifications to take advantage of the latest technology innovations remains a priority for EMVCo.
For example, the EMV Chip Specifications support various types of cardholder verification methods (CVMs). As well as PIN and signature, these include multiple biometric verification types including fingerprint, iris, voice and facial recognition.
EMV Chip Specifications also support Consumer Device Cardholder Verification Methods (CDCVM), which enable consumers to verify themselves using the authentication capabilities of their own mobile device. For example, the fingerprint reader used to unlock your phone can also authenticate your payment.
To support and drive this innovation, EMVCo has various dedicated technical working groups and also collaborates with industry groups such as ISO, GlobalPlatform, NFC Forum and PCI SSC.
Are there any examples of upcoming initiatives that you can share?
Yes. EMVCo will publish a specification to enable Elliptic Curve Cryptography (ECC) for EMV Contact transactions and with point-of-sale terminals, supported by an evaluation, testing and approval programme. Use of this cryptography standard by the payments community will enable enhanced security without impacting technical performance of a payment device or slowing transaction processing time. This is required to support new, future payment scenarios.
In addition, EMVCo has updated contactless payment terminal requirements to enable more reliable and consistent communication between the terminal and payment device through the addition of IQ modulation requirements. This reflects the growing use of self-powered payment devices such as smartphones and wearables at the point-of-sale. Mass transit is one sector that will benefit due to faster turnstile throughput, and greater flexibility in where the payment device is positioned to authorise entry into a transport network.
EMVCo has also launched a Tap-to-Mobile Early Adopter Programme to explore the functional performances of Tap-to-Mobile device solutions, and how these performances impact the consumer and merchant experiences. EMVCo is focused specifically on evaluating the best way to interact from a user interface and user experience perspective with merchants and consumers when using mobile devices as acceptance devices to promote greater usage.
Does EMVCo support the emergence of new payment technologies such as QR Codes?
Yes. The future of payments is about choice and emerging payments technologies are supporting the new ways in which consumers engage and pay for goods and services.
But regardless of the payment method, whether it be in-store or online, the key for merchants and consumers is that the technologies they use are interoperable, secure and convenient and deliver a seamless payment experience.
This is why EMV Specifications have evolved beyond the original EMV Chip Specifications to support a wide range of technologies for card-based payments that enable new ways to pay and authenticate the cardholder, including Contact, Contactless, Mobile, Payment Tokenisation, QR Code, Secure Remote Commerce, and 3-D Secure.
Looking ahead, we also recognise the potential of emerging technologies such as QR Codes and wireless payments, and we’re committed to working with organisations globally to support the opportunities and challenges of the payment community.