With the liability for card fraud set to switch in one year to financial institutions and merchants that aren't ready for EMV, many credit unions are scrambling to transition from slide-and-sign to pin-and-chip.
Visa and MasterCard have cautioned that if financial institutions are not ready for EMV by next October, they could face significant financial and reputational risk. Less than 50% of card-issuing credit unions are expected to have both credit and debit cards set up for EMV by next fall, according to some industry insiders.
"One year out from what has been called EMV's D-Day, credit unions are all over the map in terms of readiness," Brandon Kuehl, senior product manager with The Members Group, a payments processor in Des Moines, Iowa, said. "While some have completed their credit card implementations and are starting to think through the same on their debit portfolios, others have not even outlined a timetable for migration."
To get the prep work going, the $1.3 billion America's First Federal Credit Union formed a team to focus on making the move to EMV.
"When we first formulated our EMV team, we began to understand how complex the migration could become," Denise Vasut, assistant vice president of IT operations at the Birmingham, Ala.-based institution, said. "There are just so many decisions to make regarding the configuration of an EMV card, such as contact versus contactless, signature versus PIN, not to mention the design of a strategic timetable. And that's just what's going on behind the scenes."
To convert its credit card portfolio to the EMV standard, America's First is participating in TMG's EMV migration, Vasut said.
"The streamlined implementation process developed by TMG and First Data has greatly reduced the complexity of EMV implementation and is getting us to market quickly," she added.
Kuehl, author of the TMG white paper on "America's Next Step in EMV: Debit Cards," said credit unions that do not offer chip cards within the next 12 to 18 months may find themselves at risk and also at a competitive disadvantage.
"Consumers are leaning into discussions on payment fraud prevention and EMV chip cards are one of the most visible ways credit unions can show their commitment to stemming the tide on card fraud," he said.
To facilitate EMV migration, many cooperatives are turning to card processors, webinars and other resources. Visa Inc. recently kicked off a national campaign with financial institutions and merchants to support the next stage of EMV adoption.
The Nashville, Tenn.-based card services provider EFT Source, which was acquired in September by Denver-based CPI Card Group, has also beefed up EMV resources to assist clients, Bill Dinker, EFT Source president, said. To provide additional help, the company recruited EMV expert Dmitry Tarusov, who has more than 18 years of experience in the payment card industry and is considered a specialist in EMV-compatible cards and devices.
"Deepening our expertise with Dmitry was part of our plan to shore up the educational needs in the U.S.," Dinker said.
By partnering with EFT Source, credit unions can opt for custom and off the shelf card options that meet EMV standard requirements and eliminate many of the set-up decisions and associated expenses, he added.The company's patented instant issuance solution, Card@Once, is EMV-capable, Dinker noted.
"The biggest challenge is to try to make it as simple as possible for the credit unions and banks," Dinker said. "EMV doesn't have to be as complicated as it might seem."
CPI Card Group also offers EMV educational webinars through its new online portal known as Teachme.
Following a record attendance of 1,000 participants at two of its last webinars, CO-OP Financial Services, the Rancho Cucamonga, Calif.-based payments network CUSO said it plans to offer another free session this month.
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