By Ken Kraetzer
Managing the October 1st merchant “Chip Card” requirements, meeting consumer expectations for keeping card data secure, and growing utilization of mobile wallets and wearable payment devices highlighted discussion topics at the 2015 Cartes Secure Connections www.cartes-america.com Conference in Washington DC May 5-7th.
Leading off the Wednesday keynote panel as moderator, Carolyn Balfany of www.Mastercard.com, described the fury of activity this year on the part of card issuers to distribute new “Chip Cards” to customers and for merchants to have terminals prepared to accept them. The SVP of Product Delivery-EMV pointed out, “By end of 2015, 63% of cards presented will be “Chip Enabled” and 47% of terminals will be able to ready to accept them.” The benefit of the conversion effort is fraud reduction as chip cards are harder to duplicate than magnetic strip cards. Ms. Balfany indicated there is consumer preference for the new more secure cards referencing research that “40% prefer to shop at merchants that accept chip enabled cards…33% will change banks to receive one.”
A retail merchandise manager on the panel, Cyndi Keyes of www.steelhorseHarley.com based in Midlothian, VA commented that card security is a concern for consumers resulting from numerous data breeches, that consumer expectation is to “Trust businesses to not lose data.” Andy Collins of www.SunTrust.com described the goal of the program to “Drive fraud out of the system, banks continue to be pelted by fraud,” adding “Fraud is only getting worse, this needs to be the first of several efforts.”
Elizabeth Braun, vice president, at Cincinnati based www.vantiv.com described her company’s efforts are focused on “Working with largest merchants and those with highest fraud risk for third quarter installation,” adding the process requires a “lengthy testing process”. Malcolm Nunes helped prepare Home Depot for “Chip Cards” by upgrading and testing 80,000 terminals in 2,000 stores, a major undertaking.
The panel agreed on the need to educate the public on the benefits of chip enabled cards” and how to use them. They expect confusion when card holders try to use them for the first time at point of sale terminals. Rather than swipe their existing cards through a magnetic strip reader, the new cards will be “Dipped” into terminals at stores and other merchant locations. Ms. Braun commented, “This is the biggest change for consumers in decades, at point of sale, we need to walk customers through the transaction.
Michelle Evans of www.Euromonitor.com described that consumers are ready for mobile wallets that can be read by terminals, referencing a study which found that “Three of five consumers are interested in proximity payments.” Marc Airo-Farulla, Director Strategy & Innovation from the Australasia office of Boston based www.ABnote.com, complemented the success of www.apple.com/apple-pay and other early mobile wallet practioners. Mr. Farulla sees opportunities to expand usage in areas of transit, retail and loyalty but indicated more needs to be done to create the “The Want” on behalf of consumers in using their smartphones to make transactions.”
David Squires of Grove City, Ohio based www.kerncan.com described the large industry process going on to convert 3.5 billion magnetic strip cards to chip cards. The SVP for Strategy at Kern described the progression of medical service cards from “Dumb plain plastic, to magnetic strip to chip debit cards” with a need to replace 200 million of these cards each year.
Enrique Beza from the Dubai office of Munich, Germany based www.Wirecard.com described the growth potential of wearable gadgets which can monitor health data, to hearable ones which can help listen for users, to increasingly small devices which are virtually Disappearable.” Mr. Beza described his company operates in 69 countries supporting 17,000 companies. One novel gadget he described was a wrist band that could be preloaded as a debit card to use when you don’t want to take a smartphone out such as when out exercising or in busy public places.
Cartes Secure Connections www.cartes.com has anther conference scheduled this year in Paris, November 17-19th.
Listen to Ken Kraetzer’s video interviews from the conference on Youtube: https://www.youtube.com/channel/UCKwuZddllM3jg4a8ZkMo3Zg Playlist 2015 Cartes