September 3, 2014 About E-Scan | Credit Union Magazine [ Log in ]

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CU Snapshot

  June '14May '14
# of CUs6,6466,987
Members
(millions)
100.199.9
Total Assets
($ billions)
$1126.0$1,119.5
Total Savings
($ billions)
$961.7$1130.55
Net Cap.
/Assets
10.7%10.5%
Loans to Savings71.9%70.5%
Loan Delinq.0.8%0.8%

         Credit Union Indicators

Go to School on EMV Conversion

Educate staff and members using every available channel.

The adoption of EMV card technology is inevitable, and it's going to happen quickly.

The magnetic stripe version of credit, debit, and prepaid cards will be antiquated by 2017, according to the technology's proponents.

Credit unions must swap out members' cards and upgrade ATMs, as well as adapt data processing systems, fee programs, authorization methods, and fraud tools. And they could be held liable for a bigger share of fraud losses as Visa and MasterCard are changing policies used to assign liability for counterfeit fraud losses.

How should CUs prepare for this shift?

Teri Koenke, vice president of product development at PSCU, St. Petersburg, Fla., and Mansel Guerry, president/CEO of Credit Union 24 in Tallahassee, Fla., offer some advice:

Assume EMV will happen soon. "The longer you debate whether to get off the curb and compete in the race, the further behind you get," Guerry says.

Go to school. Learn about EMV now, so you can use your next strategic planning session to decide when and how to launch chip cards.

Sign up now. As deadlines near, demand on conversion services will rise. Get on the list now to prevent delays later.

Understand the implications. "Many aspects of the plastic card program will need to change, EMV presents the issuer with the opportunity to evaluate the program in its entirety and introduce other beneficial changes," says Koenke.

Run a pilot. Gain firsthand experience for staff and, later, small segments of your membership.

Start with travelers. International travelers are already experiencing problems with magnetic card acceptance overseas. Develop a solution that meets their needs to gain EMV experience.

Educate, educate, educate. Educate staff first, then members, using every available channel. Koenke sums up the key message for members with a single sentence: "We're making you safer with easy transactions that will offer the same experience anywhere in the world."

Weigh higher costs against rising fraud losses. EMV cards' higher cost varies by capabilities and volume, but you can justify this by comparing costs to rising fraud losses.

Monitor mobile payment preferences. "It's too early to predict whether or not mobile will emerge as the consumers' payment method of choice," Guerry says. He advises credit unions to observe consumer preferences for mobile and EMV payments.

Address ATMs. Koenke reminds credit unions to plan so ATM hardware and software can accept EMV cards by Oct. 1, 2015, when MasterCard and Visa shift counterfeit fraud liability to merchants who don't accept EMV cards.

Expect fraud to evolve. Hackers and fraudsters will keep trying. Make sure your EMV card program addresses all angles of future fraud with measures such as avoiding predictable PIN numbers.

Rely on multiple partners. Processors, payment networks, and other vendors are offering free EMV white papers and webinars along with personal advice. Tap those resources to benefit your program.

(Via Credit Union Magazine)