"As the UK moved to cards with chips, there was a 70 percent increase in fraud in the U.S.," she noted. "The U.S. has over 50 percent of global card fraud." Koether said that the primary reason for the increase in fraud in the U.S. is the ease with which criminals can copy the magnetic stripe on the back of a credit card, and then use that to create counterfeit cards.
Koether also said that despite the desire of some younger consumers to move to cash for purchases, cards are still widely used in the U.S., making up more than 70 percent of all non-cash transactions. But she said that consumers in the U.S. are waiting for cards with EMV chips. The survey found "69 percent of Americans believe chip cards will increase security of their financial transactions," she said.
"There is a trust in technology and [in] their financial institutions to ensure their safety," Koether said. She also noted that most consumers in the U.S. appear to be unaware of their credit card issuers' plans, with a large majority saying that they don't know when they'll get cards with chip technology. She also said that they're unaware of what's called "contactless" chip and PIN cards that use NFC technology to allow the card to communicate with the card reader.
While contactless payment cards have been around for 10 years or so in the U.S., they're not the same as the new cards that are coming. The new cards will use NFC protocols and will depend on the encryption in the EMV chip when they communicate. The previous version simply depended on the same information as the data on the card's magnetic stripe.
What's interesting is that the shift to accepting chip and PIN cards in the U.S. is about 20 percent complete, even though the major banks are still planning to limit their EMV roll-out to chip and signature cards.
The reason, apparently, is that the banks don't believe that Americans want or will be able to use the PINs, despite the fact that most consumers in the U.S. say that's what they want and despite the fact that virtually all ATM transactions already use PINs.
It would appear that the lethargic roll-out of chip and PIN EMV cards in the U.S. isn't really due to the lack of acceptance on the part of customers, but rather the fact that expectations from the market in the U.S. has outstripped the credit card issuers' planning.
In short, the banks started out down one road, while most consumers are heading down a different road. But I suppose it should be no surprise to know that most of the banks are out of touch with their own customers to this extent.