EMV Chip Card Deployment In Visa Asia Pacific

“At this rate of growth, we expect to see 80 percent of the terminals in Asia Pacific EMV compliant by 2010. EMV migration across the region is gaining momentum, fueled largely by the deployment of EMV-compliant terminals for chip card acceptance. The more merchants accept chip cards, the more cardholders will want to use them and Visa and its member banks will naturally be accelerating the issuance of EMV chip cards to meet this increasing demand from consumers,” said Paul Jung, Visa Asia Pacific’s regional head, Emerging Products and Technology.

Eighteen markets across the region are accelerating their migration programs. Japan, Taiwan and South Korea have implemented national migration programs. The more advanced chip markets have already begun employing EMV chip to offer consumers more innovative products, spurring the demand for chip cards. Malaysia, which has already completed its migration to EMV chip, launched the world’s first EMV-based Near Field Communication contactless mobile payment pilot in April, and since early September, Taiwanese have been the first in the world to make contactless payment at self-service gasoline stations using EMV-based contactless chip cards.

Visa Asia Pacific has increased its leadership on contactless payment, with more than one million Visa Wave cards issued and more than 11,000 contactless card readers deployed in several markets. Market highlights include:

• Japan – with more than 30 million Visa EMV chip cards as at June 2006 – a 37 percent year-on-year growth;
• Taiwan - with more than 90 percent of its terminals EMV compliant and six million EMV chip cards - a 69 percent year-on-year growth;
• Singapore - where 80 percent of terminals are now EMV compliant;
• South Korea – with 5.3 million EMV cards, more than twice what it had in June 2005; and
• Indonesia - where the Bank of Indonesia, the country’s central bank, has set a chip migration mandate for credit cards by 2009.

In Australia, the federal government will soon introduce a chip-based Access Card for use in the administration and payment of health and social service benefits. The national initiative will help familiarize Australians with the convenience and ease of use of smart cards, paving the way for its use as a payment instrument.

EMV chip and contactless cards offer cardholders much greater security against counterfeiting. The chip card sends a secret message to authenticate every transaction made, making it practically impossible for a fraudster to steal information to create counterfeit cards. The effectiveness of EMV chip cards in eradicating counterfeit fraud2 was demonstrated in Malaysia where domestic counterfeit fraud had virtually disappeared in the first quarter of 2006 from US$677,000 the year before when the full effects of EMV migration had yet to be realized. Visitors to Malaysia who pay with their Visa EMV chip cards are also protected against counterfeit fraud.

“The competition to offer consumers more innovative EMV payment products will only intensify. Banks that want to retain customer interest and loyalty will be best served by moving to EMV as fast as possible – that way, they can build on technology to maintain card security levels and add on new features to meet the increasing expectations of consumers” said Jung.