Will we see EMV in the U.S.?

Will the U.S. ever adopt EMV?

There has been a lot of discussion lately about whether  the US should adopt EMV  After all, the U.S. is the only developed, modernized economy that has not made a move towards the adoption of EMV. 

The vision of EMV is to create a credit and debit card payment system without borders that stops fraud at point of sale.  There are three main reasons why the U.S. has not adopted EMV to date

1.       The payment networks have not enforced it (whereas it has been enforced in other regions)

2.       The U.S. retail payments market is strikingly different from the rest of the world in its infrastructure, regulation, business practices, and even consumer payment preferences

3.       U.S. financial institutions and processors simply have not yet found economic value in moving to EMV

So why, then, has the rest of the world embraced EMV?  From a technology and infrastructure perspective, it was relatively expensive to lay the telecommunications infrastructure to go online for every single authorization – particulary when an authorization request needed to be routed cross-border.  However, fraud mitigation was and is a major driver.  EMV has helped to reduce card fraud signficantly in the markets that have moved to full adoption (as a result it has shifted to markets where EMV has not been adopted).  In addition, there is an element of innovation and investment in certain markets that saw the value in having computing technology on a commonly used consumer transaction token.  If consumers favored using cards, let them use it for more than just payments.  Very quickly, other applications began to evolve that could be supported through chip cards.

With that, what are your thoughts on the U.S. moving to EMV?  Are Americans ready for it?  Are American banks ready to move forward to be in line with the rest of the world?  Are issuers and acquirers prepared to make investments in this area of payments technology?

Jim