Debit Begins Its Shift to More Secure Types of Transactions

by Sarah Grotta 0

PULSE recently published its 2016 Debit Issuer Study. The press release that accompanied the publication of this annual study had some surprising information regarding the percentage of times that an EMV chip card is used at an EMV chip enabled point of sale terminal. Although issuers are rapidly migrating their debit portfolios, the occurrence of chip-on-chip transactions is relatively low, although improving:

Largely due to the slower-than-anticipated pace of merchant adoption, the use of chip cards at chip-enabled terminals remains limited. Even among consumers using chip debit cards, only 11 percent of their chip card transactions were at chip-enabled terminals. The remaining 89 percent were processed as traditional magnetic stripe or card-not-present transactions, such as online purchases.

When taking into consideration all debit card transactions, chip debit transactions (chip cards used at chip-enabled terminals) accounted for only 4 percent of total debit transactions.

Nonetheless, chip debit transactions are growing at triple-digit rates year-over-year. Issuers view the shift to chip debit cards as a critical step toward increasing the security of card-based transactions and reducing fraud loss rates.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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