The move is designed to allow its credit unions to provide their members with travel cards that can be accepted overseas, according to Vladimer Jovanovic, Senior Manager of Prepaid Card Products at PSCU.
In the United States, magnetic stripe-enabled payment cards are dominant. However, the EMV chip and PIN cards are popular seemingly everywhere else. When U.S citizens travel overseas, their mag stripe cards do not function in EMV terminals, where cards are inserted rather than swiped. With the rise in popularity of prepaid cards as an alternative to traditional credit and debit cards, along with the card brands' mandates for EMV adoption in the United States, an EMV solution was only a matter of time.
St. Petersburg, Fla.-based PSCU decided to be first to get ahead of the curve, Jovanovic said. PSCU's EMV prepaid cards will allow U.S. consumers to avoid the inconvenience of purchase declines at EMV-enabled POS terminals overseas. Additionally, EMV cards offer greater security than mag stripe cards, which are more subject to fraud because mag stripes have simpler data encryption schemes. However, the chip embedded in the card provides secure data storage and issuer-specific encryption keys to thwart fraudsters' attacks, while the user-specific PIN acts as a second layer of security, according to PSCU.
Jovanovic said many of PSCU's credit unions service U.S. military personnel stationed in Europe and elsewhere. He noted the travel card thus serves the needs of such personnel, as well as general travelers. PSCU members already issue EMV-enabled credit cards. With EMV prepaid cards soon to be added, that leaves debit cards to be the final product to be transitioned to the EMV security standard, which is in development, Jovanovic said.
Reloading on PSCU's EMV prepaid cards will be accomplished online and through an interactive voice response system. Cardholders will be able to top up accounts using credit and debit cards, account transfers and through direct deposit. Jovanovic said reloading via mobile phones is being evaluated by PSCU. The EMV prepaid cards will also be mag stripe-enabled for use in the United States. Jovanovic said the initial phase of travel card issuance will be followed by the release of an EMV general purpose reloadable card.
In addition to providing greater convenience and security for its customers, PSCU has another reason to move to EMV. In August 2011, Visa laid out its road map for accelerated EMV adoption in the United States. Visa stated that the migration to EMV will prepare the way for the adoption of near field communication-based mobile payments. Visa issued a number of important dates:
Jovanovic said MasterCard published slightly different dates for its roadmap. The card brands' EMV mandates motivated PSCU to make the move. "This really puts our credit union ahead of that curve where the liability is going to shift to a party that is not utilizing EMV technology," he said.
Jovanovic expects other financial institutions to follow PSCU's lead. "I think emerging technologies are what drive this industry," he said. "In looking at EMV, I think every credit union is going to be looking toward EMV as a product that they want to offer."
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