EMV chips gain strong
momentum
The New Straits
Times Press (Malaysia), 22 April, 2004
By:
Cynthia Pearson
Original
article Copyright 2004 to, and can be found at
eMedia NSTP
THE migration from magnetic stripe to the
Europay-MasterCard-Visa (EMV) chip standard promises enhanced credit card
security, and the opportunity to offer loyalty and reward programmes to
cardholders. Thus, Visa and MasterCard are busy championing the standard with
various initiatives.
Philip Yen, Visa Asia-Pacific’s executive vice president for emerging product,
is responsible for Visa’s migration to the EMV chip standard, and the
development of online and mobile payments. Migration to the EMV chip standard
combats card fraud and provides authentication for the cardholder, among other
benefits.
Yen tells Business Computing that the momentum for EMV migration has now become
self-sustaining in most parts of the world.
Visa has been spearheading the creation of the EMV smartcard infrastructure by
establishing global standards and by working collaboratively with its members
and industry partners to lower the barriers to entry. It has also invested in
resources, and developed programmes to help its member banks migrate.
He adds that under the Visa Smart programme, a wide range of smart payment
products and services have been developed to protect and extend its members’
business interests.
The move to chip has received strong support with national migration programmes
being implemented across the region, including Taiwan, South Korea and Malaysia,
which will complete migration of all cards by end of this year and terminals by
end of 2005.
“Within Asia-Pacific, Visa has issued more than 20 million Visa EMV cards, and
globally this figure is in excess of 100 million. Since January 2003, every new
point-of-sale terminal deployed in the region is required to be EMV-compliant.
By 2008, we expect over 90 per cent of all terminals to be EMV-enabled,” Yen
says.
According to Jim Cheah, vice president and senior country manager (Malaysia &
Brunei) of MasterCard International, the company is facilitating EMV migration
with its OneSmart programme, an umbrella solution for introducing chip in a
systematic manner through a choice of applications and technology.
“With our OneSmart programme, MasterCard International has been spearheading the
rollout of EMV programmes in Malaysia, which has yielded promising success; we
have experienced over 350 per cent growth of the MasterCard EMV smartcards
issued over the past five months, from six of our member financial institutions
who have rolled out smartcards, namely Bank Islam, Southern Bank, HSBC, RHB,
Public Bank, and Bumiputra Commerce,” he says.
He adds that apart from security issues, the multi-application functionality of
smartcards will allow personalisation and customisation of loyalty and reward
programmes based on cardholder information stored in the chip, powering the
conventional payment tool with the potential to become lifestyle cards.
“We presently have three such member institutions in Malaysia offering loyalty
programmes attached to their EMV cards, namely the Southern Bank BlueChip
MasterCard, RHB EVO MasterCard and Public Bank Executive MasterCard.”
Payment channels
The migration to EMV is important to
facilitate innovation and growth in payment products and technology.
Visa’s next-generation technology strategy for the region is aligned to its
vision of universal commerce, and its goal is to enable new ways to conduct
commerce anytime, anywhere.
“The company’s vision of ‘universal-commerce’ or u-commerce is a world where
traditional barriers to doing business, such as access, geographic borders or
time differences, simply disappear,” Yen says, adding that the company continues
to develop new payment mechanisms and standards.
He points out that the migration to EMV will enable its members and their
partners to develop strong consumer product offerings through the ability to
combine multiple payment and non-payment functions on a single card or phone for
that matter.
Yen adds that Malaysia is a leading example of this type of innovation through
the development of the Payment Multiple Purpose Card (PMPC) and MyKad.
He says Visa members are increasingly beginning to exploit the synergies of
combining Visa payment and transit access to secure top-of-wallet status for
their program, and increase overall consumer spending.
Online purchase
Yen says online purchase is one of the
fastest growing areas for Visa transactions and is extremely important to Visa.
It is one of the areas he is responsible for developing further.
Visa’s regional e-commerce sales grew by 75 per cent over the past year, driven
mainly by travel, ticketing, bill payment and electronic sectors.
Yen says the growth demonstrates the consumer appeal of online payment as a
major sales channel, but says Visa is continually enhancing online and mobile
payments to make the consumer experience safer, simpler and more convenient.
“Security is one of our greatest priorities, and that is why we have created the
Verified by Visa payment authentication programme for online and mobile users, ”
he says, adding that Verified by Visa has been
implemented globally and across all major markets in Asia-Pacific.
Verified by Visa offers cardholders a similar shopping experience and level of
security they receive when making face-to-face transactions.
Yen says in markets where Visa has seen widespread adoption of Verified by Visa,
research has shown that it can significantly help reduce consumer concerns about
online shopping. Already, 20 million cardholders are enrolled in the service.
In terms of mobile payment, Yen says Visa members have been pioneering the
world’s first proximity payments programmes.
“In Japan and Korea for example, Visappi and Moneta have successfully leveraged
the consumer appeal of mobile payment to open up new acceptance channels and
develop new sectors such as convenience stores where traditionally payment cards
have not been accepted,” he points out. “The partnership between Visa members
and telecommunications companies also enables a new distribution channel for
payment products.”
Original article
Copyright 2004 to
The New Straits Times Press (Malaysia) Berhad
