Brief

MasterCard: 88% of cards have EMV chips, 2M merchant locations chip-active

Dive Brief:

  • MasterCard announced fresh data on the progress of EMV chip card adoption and acceptance, stating that as of July 2016, 88% of consumer credit cards in the U.S. had chips, an increase of 105% since October 2015 (which signaled the official shift from traditional “swipe-and-signature” credit and debit cards to chip-and-pin options).
  • MasterCard also said there were 2 million chip-active merchant locations on its network as of July, a 468% increase in chip-enabled terminal adoption since October.
  • Of those 2 million chip-active merchant locations, 1.3 million are regional and local merchant locations, representing a 159% increase since October.

Dive Insight:

After a very slow and troublesome beginning to the EMV era, MasterCard now sees fit to give us monthly updates to prove that the chip card transition continues to move forward. The adoption and acceptance numbers are reassuring, though MasterCard also offered up some more meaningful numbers about actual consumer usage of chip cards, as well as the extent to which the appear to be reducing fraud.

Among results from a survey MasterCard commissioned from Braun Research, 87% of 1,000 U.S. consumers surveyed said they commonly use chip cards, up from 49% last year. Also, MasterCard fraud data suggests the chip cards are having a positive effect: Counterfeit fraud costs at U.S. retailers who have completed or are close to completing EMV adoption declined by 54% between April 2015 and April 2016. Meanwhile, counterfeit fraud costs increased by 77% year-over-year among large U.S. merchants who have not yet migrated or have just begun the migration to chip.

Still, questions linger about how effective chip cards ultimately will be. NCR last month suggested the cards have a security flaw that could allow tampering, which eventually could lead to fraud activity. Also, some retailers have said the chip terminal transition has been so involving and cumbersome that it has kept them from spending time working on other payments initiatives.

This is positive news overall from MasterCard, but after the chip card and payment terminal transition is done, card companies and retailers will have to take a step back to make sure other aspects of the payments ecosystem haven't suffered in the interim.

Recommended Reading:

Filed Under: Technology Consumer Trends Payments
Top image credit: Flickr; reynermedia