EMV Works for UN Federal Credit Union, Reports Strong Metrics

At this week’s Smart Card Alliance conferencetitled “The Roadmap to EMV Payments and Secure ID”, the programleader for the UN Federal Credit Union EMV card issuance reportedsome cheerful stats for those considering issuing EMV cards totravelers. Merrill Halpern reported strong performance acrossmultiple metrics:

• Applications up 153 percent
• Credit Line Increase Requests up 275 percent
• New Credit Lines booked up 382 percent
• Revolving Balances up 20 percent
• Purchase volume up 18 percent

UNFCU asks its cardholders to pay a $50 annual fee to whichHalpern reports zero resistance. The financial institution does notoffer a rewards program. Because of the UNFCU’s EMV card program,cardholder frustration with blocked magstripe transactions hasvanished, a problem that had been growing rapidly.

For the price of the card and no small amount of deploymentlogistics, UNFCU substantially strengthened its card program. Notbad. For the traveler niche, at any rate, the UNFCU experienceaffirms the truth of a faulty card issuer equation: “No EMV = PoorAcceptance = No “top of wallet” status for your card.”

But, as our report, EMV in the USA: Waiting on Debit, a Mandate, or Just the OpportuneMoment, made clear, the USA is not a nation of internationaltravelers. Only 21 percent of us are passport holding, payment cardcarrying candidates. But for that large subset of us, the growingisolation of the magstripe-bound U.S. traveler is on its way tobecoming a serious problem. If European agencies ban the magstripeon European payment cards, in five years, visitors from thosenations will have no way to pay when visiting the U.S.

Hmm, no way to pay? That just might make the acquiring side takenotice. This “portal” phenomenon could get us moving. Gettingacquirers to serve locations where international travelers are mostcommon – think South Florida (LATAM travelers), New York City(travelers from anywhere), and in the border states servingCanadian and Mexican customers – may be one way to unblock merchantEMV acceptance.

Of course, any such move by the acquiring side won’t be sufficientto get issuers off the dime (or few bucks) that it will take toissue EMV cards systemically in the U.S. Because all of theseentities can’t individually find an ROI, the entire paymentsecosystem remains exposed. As the rest of the world tightens itspayment perimeter, the U.S. looks more like a backwater than a fullparticipant in the global payment system.