Why EMV Will Lead the Payments Security Transformation

March 9, 2015         By: Kevin Xu

As October’s EMV liability shift quickly approaches, payments industry stakeholders are not just preparing for the considerable transition to chip card usage in the U.S. – they’re also laying the foundation for the future of payments, including mobile and other emerging payment technologies.

But while the chip infrastructure is expected to deliver significant benefits in the card present environment, card networks are also acutely aware of the additional avenues of risk opening up as fraudsters shift their focus to areas such as online spending.

Ellie Smith, who leads the Discover’s Chip Center of Excellence, sits on the EMF Steering Committee and holds a seat on the EMVCo Executive Committee, shares her thoughts on the ongoing U.S. EMV rollout, as well as what’s next in the future of payments security.


Multi-channel payments and multi-channel security

As different payment channels emerge, brick and mortar merchants must ensure they continue to provide a seamless and secure payment experience – all while staying relevant with their consumers by providing a variety of payment options.

The current focus is on getting chip cards into the hands of consumers and educating merchants on its usage and the benefits of adoption. EMV is a strong pillar in cutting down fraud. While it is the cornerstone in the future of payments security, Smith stresses that the industry must “look beyond card-present transactions to securing all other channels of payments.”

A more secure point of sale means that fraudsters will target the next point of weakness.

According to Smith, “Consumers are advancing their behavior and preferences quickly. Beyond the move toward using contact and contactless EMV, they are also increasing their online shopping, using mobile devices for all types of banking-related transactions, and becoming more comfortable using NFC-enabled technology for payments via mobile devices.”

Greater volumes of online payments naturally mean a greater risk for card-not-present fraud.

To this end, Discover is using chip cards as the foundation for multi-channel payments security. EMV can be used to secure card-present transactions, while transactions in the card-not-present channel can be secured using tokenization and more intensive customer authentication through the next generation of 3D Secure.


A unified approach

Payment networks must contend with supporting all the moving pieces in payments. The challenge is in bringing these players together to find common ground in security, and promoting industry standards, such as EMV.

Despite the abundance of competition, Smith believes “this is not a time for industry players to create specifications and standards for emerging payments that only apply to their system. Instead, Discover strongly supports the industry coming together to enable emerging commerce.”

The best, and perhaps only, way forward is through continued collaboration, and “the right solution requires collective industry support, universal standards, and equal opportunity,” Smith explained.

Discover is partnering with card issuers, merchants, acquirers, processors, and value-added resellers in the industry to support the implementation of EMV, as well as deliver other security solutions that will protect across the payments ecosystem.

The main takeaway is that the industry must remain active and partner for greater and unified security measures. “One of the major hurdles the industry faces is continuously increasing security, and we must come together in order to do so,” says Smith.


What’s next?

The payments industry itself must look towards these new advancements and adapt. Smith states, “We are in a time of digital transformation, with great opportunities to leverage new technology that offers customers more seamless, secure, and convenient ways to pay. In this evolving landscape, we are embracing change, as it’s going to drive more merchant-friendly solutions and innovative payment methods for consumers.”

Most importantly, regardless of the innovations and security standards that are yet to come, “payments must remain frictionless, simple, and most of all, secure, for consumers.”