Table of Contents
CHAPTER 1 INTRODUCTION
- What is this briefing about?
- Who is the target reader?
- How to use this report
CHAPTER 2 EMV IN CONTEXT
- EMV explained
- EMV creates a global framework for smart card technologyand thus promotes international adoption
- The lack of a common standard for smart card technologyhas hindered adoption of such technology in the financial services sectorin the past
- The primary rationale for adopting EMV is fraudprevention, but there are other benefits
- EMV as a fraud prevention strategy
- EMV as a loyalty enhancer
- EMV as a transit device
- EMV as a contactless payment device
- Other uses of EMV-compliant technology include IDauthentication and the enforcement of spending limits
- The founder members of EMV have introduced variousincentives to encourage migration
- Visa, MasterCard and more recently JCB are activelyencouraging EMV implementation among stakeholders
- Moreover, they have introduced the liability shift topenalize non-compliance to EMV
- The liability shift introduced by the card schemes is oncross-border transactions
- However, the fact that there is no set deadline for EMVcompliance may hamper progression
- Despite these incentives EMV migration is progressing at aslower pace than expected
- EMV migration is progressing at a different pace globally
- Similarly, EMV migration is uneven in Europe but progressis on the whole significant
- 25 per cent of terminals and cards are EMV-compliant inEurope
- Visa Europe is satisfied with EMV progression
- SEPA will help drive EMV migration in the eurozone
- The European Payments Council set up a Cards Working Groupin 2002
- EMV implementation is one of the priorities of theEuropean Card Fraud Prevention Task Force
- The final date for SEPA framework including EMVimplementation is 2010
- Analysis of EMV migration in other regions revealed a lessadvanced stage than in Europe
- EMV implementation in Asia Pacific is proceeding at pacein a few countries
- EMV implementation is under way in Canada but is in itsearly stages
- EMV implementation in the US has failed to get under way
- Datamonitor Cards and PaymentsTeam view
CHAPTER 3 PROGRESS OF EMV MIGRATION IN EUROPE
- EMV migration has been quicker for ATMs and bankcards thanEFTPOS terminals
- 38.4 per cent of ATMs and 35.0 per cent of payment cardswere EMV-compliant by end of June 2005
- EMV Migration of EFTPOS is the slowest
- Reluctance of mid-tier retailers who own their terminalsis impacting on EMV progress for EFTPOS
- EFTPOS security level requirements differ for somecountries
- On a country basis, implementation is at varying stages ofprogress
- Only a handful of countries in Europe have reached anadvanced stage in their EMV implementation
- Only two countries in Europe have reached an advancedstage in EMV conversion in each of the three areas to be upgraded
- Three of the big five European countries distinguishedthemselves by their leisurely approach to EMV
- Zero per cent EMV conversion for EFTPOS terminals and ATMsin the Netherlands
- Migration speed is down to the business case
- Case studies: smooth and advanced progress
- The UK: at the forefront of EMV migration
- The progress of EMV roll-out in the UK
- The business case: to cut massive card fraud losses
- What factors have contributed to the smooth implementationof EMV roll-out in the UK?
- The UK has opted to move to single application cards
- The UK migration programme was co-ordinated by a singlenational organization
- Involvement of retailers at an early stage
- Conducting a pilot trial before roll-out
- Luxembourg: preventing fraud migration
- Only a few ATMs are stopping Luxembourg from completingits migration
- The business case was one of prevention
- The ingredients of success
- France: aligning with the international standard
- EMV migration in France
- The EMV migration in France is another success story
- Case studies: behind the field
- The Netherlands: a classic story of a weak business case
- But there is a business case for credit cards
- However, with the exception of POS terminals, paymentcards and ATMs will have to be EMV-compliant by 2010 in the context ofSEPA Cards Framework
- Datamonitor Cards and Payments Team view
- Germany: low card fraud ratio and technical issues arehampering progress
- Fraud is low in Germany, with 80 per cent of fraud lossesaccounted for by cross-border transactions
- EMV migration is progressing at a very slow pace in theGerman market
- Datamonitor Cards and Payments Team view
- Spain and Italy: low fraud losses versus huge EMVimplementation costs
- Rising fraud levels may push players in the Spanish andItalian market to revisit their business case
- Datamonitor Cards and Payments Team view
- Conclusion
- Does the geography of implementation matter?
APPENDIX
- Supplementary information
- Definitions
- CAGR
- Card-not-present fraud
- Counterfeit fraud
- Credit card
- Debit card
- EC
- EMV
- ePurse
- Fraud ratio
- Identity theft
- Lost or stolen card fraud
- Mail non-receipt fraud
- Neural network
- Point of sale terminal
- Smart card
- Skimming
- Research methodology
- Relevant links
- Future readings
- Datamonitors custom research capabilities
- Cards & Payments Team contact details
- How to contact experts in your industry
List of Tables
- Table 1: The date of the liability shift associated withEMV compliance by region
- Table 2: The implementation of EMV in Asia Pacific inthe three key areas - cards, point of sale (POS) terminals and ATMs,January 2005
- Table 3: Progress of EMV migration in Europe, 30 June2005
- Table 4: Card fraud losses on UK-issued cards by fraudtype, 2000-2004
- Table 5: Card fraud losses on internationaltransactions, 2002-2004
- Table 6: Card fraud losses on UK-issued cards, 1995-2004
- Table 7: Total card fraud losses on French-issued cardsand French-acquired cards, 2002-2004
- Table 8: Current relevant Datamonitor publications, 2005
- Table 9: Future relevant Datamonitor publications, 2005
List of Figures
- Figure 1: EMV Progress in Europe, 30th June 2005
- Figure 2: After dipping slightly in 2003, card fraudlosses rose by 20 per cent in 2004 to reach ｣504.8 million, 1995 to 2004
- Figure 3: France witnessed a fall in total fraud lossesin 2004, 2002-2004
- Figure 4: Datamonitors core consulting capabilities
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