Contactless could soon make its mark in America, but not until certain changes have been made. Where a signature or swipe of a magnetic strip was previously the norm, Europay, MasterCard and Visa technology, otherwise known as ‘EMV’, has gradually been rolled out in the United States to make chip cards standard - eventually making the move to contactless. Yet despite the fact all shop owners are required to own the correct terminals from October 2015, the country remains sceptical of its benefits. So what is it about chip tech that has left the US trailing behind, and why have they chosen to change now? With the UK and other European countries its ambassadors since the 90s, it would seem that this technology just hasn’t had the same impact with our cousins overseas. But that is all about to change…
When it comes to financial security, European countries have been early adopters of Chip and PIN technology. In Europe, pre-EMV days, fraud was rampant as some merchants would take over a day to process a cinema ticket, takeaway pizza or petrol stop, giving fraudsters ample time to clone the magnetic strip of the old style cards. However, in the US, transactions are verified in real time so fraud was less of issue… until now. With America being the only major market still using magnetic strips, the real time verification isn’t secure enough; so the move to chip cards is more pressing as chip cards offer a unique number for each transaction, making it more difficult to for cards to be cloned. With fraud becoming more commonplace on a global scale, the US aligning with other EMV friendly countries is certainly high on the agenda.
A contactless voyage
As one of the most popular tourist destinations, America wants to make it easier for tourists to visit and spend their money. With the roll out of EMV terminals, holidaymakers from around the world can pay swiftly and securely with a chip card. As opposed to the ‘dip and sign’ transaction, a PIN number makes the payment more secure. Likewise, when American tourists visit Europe on holiday, a chip card makes it easier for them to pay for souvenirs with their four digit number. Not only does EMV make international payments more secure, it’s the universal way to pay, so it would help improve the shopping experience of tourists.
Land of the fast, home of the convenient
The convenience capital of the world, America and EMV go together like two peas in a pod. When it comes to paying for goods, consumers of the fast food nation have come to expect nothing less than speed, simplicity and satisfaction. And despite recovering from its last recession, Americans have become thriftier than ever, spending little and often – the perfect territory for a contactless future. As a result, the integration of EMV technology only serves to help accelerate the transition to contactless as merchants upgrade their terminals and consumers are issued with the latest chip cards.
America’s supersizing its spend again
When the recession hit the U.S in 2007, almost 75% of Americans stated that they had lost a job or knew a relative or friend who been made redundant. Understandably, this caused the nation to become extremely cautious when it came to parting ways with their cash. Even now, spending habits are only just returning to that of pre recession levels. With consumption back on the rise, it makes sense that little and often necessity buys are the main call of order. This paired with an estimated 75% of credit cards and 41% of debit cards set to be chip enabled by the end of the year, the way is paved for a contactless future. Like the UK, where contactless is most frequently used down the pub or at the supermarket it appears that this trend could soon transcend across the Atlantic.