Sunday, August 28, 2011

Mobile payments could make EMV obsolete

It seems as if the EMV wave is about to break over the US. The ultimate technology to protect against the cloning of plastic cards has been tested in many markets and enough evidence exist to show a dramatic reduction in fraud (especially based on card cloning). (Read here). A perceived growth in card fraud in the US may necessitate a major drive to deploy this technology. The massive potential cost of retail infrastructure is of course the biggest stumbling block.

It seems as if there are a perception that a move to EMV is required in order to effectively implement mobile payments. (Read here). While this may be the case (to some degree) in preparation for retail NFC, this is of course not true at all. Mobile payments could successfully be deployed without any EMV infrastructure available. The best evidence of this is to look at the dramatic growth of mobile payments in emerging markets where no EMV infrastructure is available.

To the contrary, a clever deployment of mobile payments, may actually lead to making plastic cards redundant and thus eliminating the need to protect against cloning... making EMV obsolete.

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