Although the initial deadline for migrating credit and debit cards in the U.S. to EuroPay, Mastercard and Visa (EMV) card security standards passed on October 1, 2015, no one expects the full migration to be completed until 2017. That’s good news for many financial institutions because according to early industry observations, a majority of banks and credit unions around the country failed to meet the target date. In fact – according to Mastercard data – at the end of October, 46 percent of American consumers had not yet received chip cards.
But there is some progress in the EMV adoption. The Payments Security Task Force projects that 60 percent of all cards will be chip-enabled by the end of 2015 and 98 percent of cards will include EMV fraud protection by the end of 2017.
EMV migration isn’t the only reason to review existing credit/debit card service contracts
Likewise, uncertainty regarding what the fraud liability shift possibly represents for their business has made the decision to begin the EMV migration process difficult for many financial institutions. In many cases, smaller institutions – with lower perceived fraud risk – believe their fraud-related costs will be less than the price of reissuing new credit and debit cards to all of their customers.
However, there are substantial cost-savings and improved service benefits to gain by taking a look at your current debit and credit card provider and processing contracts regardless of whether or not you have completed the transition to the improved fraud protection technology.
If you are in the process of migrating to EMV cards for your customers, are you satisfied with how your current card brand provider is handling the transition? If the current strategy calls for issuing new customer cards as they expire, did you know that some card providers offer incentives for mass migration? This can translate into substantial savings and streamline the process of upgrading to more secure technology. Plus, it gives you the opportunity to educate all existing card holders at once – which will save time for your customer-facing staff.
And, newer services – such as the ability to turn a credit card or debit card off from a mobile app – can help to alleviate customers’ security concerns if they have misplaced their card or fear fraudulent activity.
Also, if you haven’t taken a look at your card processing contracts to make sure you were getting the best possible rates and contract terms, you might be surprised to learn that you are paying more for your card processing than your competitors. Think about what improvements you could make or new services you could offer if these on-going expenses were reduced. Remember, your processing vendor most likely won’t offer better pricing or service terms if you don’t ask.
Don’t leave potential savings on the table
If your institution has been taking a wait-and-see stance on converting to EMV technology, now is a good time to learn more about the potential incentives, savings and service improvements that a review of your existing card brand and processing contracts can offer.
Either way, it’s important to also make sure you are getting good value and quality service from your existing card brand and processing vendor. An expert contract negotiator can take a look at your existing contracts to uncover potential incentives, savings and improved service opportunities, and renegotiate with your existing vendor to improve contract costs and terms. Or, open up a dialogue with competitors to find savings and better service opportunities.
Having a professional take the lead on the process will save your organization time, provide contract review and negotiations expertise that you may not have in-house, and give you optimal savings and service improvements based on industry knowledge and experience from working with similar institutions. The result will be a win-win for your institution and your account holders.