US Payments Forum Market Snapshot: The State of Contactless Payments, Fraud and What’s Next for 2019


PRINCETON JUNCTION, N.J., Dec. 11, 2018 (GLOBE NEWSWIRE) -- The U.S. Payments Forum today released its quarterly Market Snapshot, providing a look at the state of EMV chip adoption in the U.S., fraud and what’s next for payments in 2019. 

State of the Market: With chip-on-chip transactions steady, is contactless next?
According to the U.S. Payments Forum, 99 percent of the top 200 retailers are now chip-enabled and chip-on-chip transactions make up 60 percent of overall transaction volumes in the U.S. Additionally, more than 50 percent of transactions are taking place at contactless payment-enabled merchants.

Will 2019 be the year of the contactless payment? According to U.S. Payments Forum director Randy Vanderhoof, “Unlike other countries that moved swiftly to contactless payments, we won’t have a ‘year of the contactless payment.’ Instead, the payments industry will focus on giving consumers the choice to use contactless where speed and convenience is highly valued, and as a result of that, contactless and mobile transaction volumes will grow over time.”

Vanderhoof added, “We’re seeing steady upticks in contactless and mobile wallet transaction volumes, but most card issuers and merchants are evaluating the business case and planning for next year. 2019 will be a year where we’ll see dual-interface cards hit the market and more merchants become enabled to accept them. It’s likely we’ll see this happen most in metropolitan areas with larger transit systems, as they are migrating to EMV contactless at the same time.”

Trending Topics: Confirming chip payments effectiveness at curbing in-store counterfeit card fraud
Some recent media coverage around a report called into question the effectiveness of chip card payments at reducing fraud. The U.S. Payments Forum offers several clarifying points in response to media coverage on the report.

“The report in question provides some statistics on compromised records but offers no data on actual occurrence of fraud. Chip payments are effective at reducing fraud. Chip payments were introduced to curb in-store counterfeit card fraud, which was the largest source of fraud in the U.S. Counterfeit card fraud is down over 80 percent at merchants that have enabled chip, so it is indeed working,” said Vanderhoof. “We’re also seeing card-not-present fraud staying relatively even as a percentage of online sales.”

The full statement is available at https://www.uspaymentsforum.org/media-statement-addressing-recent-headlines-around-emv-chip-payments-and-fraud/.

Forum Priorities: Authentication comes into focus for 2019
As merchants and issuers work to secure the e-commerce channel, several authentication methodologies and standards have become available, leaving stakeholders with questions around what they are, what problems they solve and how they fit together. These include EMV 3DS, W3C Web Payments and Web Authentication, FIDO and EMV Secure Remote Commerce (SRC).

In 2019, the Forum will focus several projects on helping the industry understand these different authentication methodologies and standards and how they can best be implemented for payment credential, user and transaction authentication in e-commerce. Merchants, issuers and other payments stakeholders that have questions around these and/or other methods for securing e-commerce should join the Forum and attend the next meeting.

Securing the e-commerce channel is the focus of several Forum projects underway including white papers on tokenization and fraud mitigation approaches. Other EMV and emerging technology-related Forum projects underway include:

  • Targeted educational resources on contactless payments
  • A transit payments 101 webinar to provide a high-level overview and implementation guidance for transit open payments
  • A white paper on transit contactless open payments use cases for paying with aggregated fares
  • A white paper providing guidelines for contactless transactions at the point of sale (POS)
  • Resources providing guidance on streamlining Level 2 contactless testing and certification
  • Updates to white papers to provide guidance on implementing PIN bypass for contactless transactions
  • An updated resource on effective approaches for mitigating card-not-present fraud
  • A mobile wallet “lunch and learn” webinar series
  • A resource to discuss lessons learned regarding tokenization implementation
  • An educational resource on use cases for wallet identifiers for mobile payments
  • A white paper on EMV fleet card processing requirements for the petroleum industry

Resource Recap
Today the U.S. Payments Forum released the “Understanding the True Costs of Fraud” white paper to highlight the costs associated with fraud that extend beyond monetary value and include reputational, operational and regulatory costs for both merchants and consumers. The resource covers three example case studies from different stakeholder perspectives to address the complexities associated fraud and show that all who participate in the payment ecosystem must remain adept and continue to adapt in their mitigation strategies.

Other resources published this quarter are:

  • Dual-Interface Card Personalization white paper. This resource provides an educational resource on ODA and provides recommendations for issuing and personalizing dual-interface cards for the U.S. market.
  • Transit Contactless Open Payments: Technical Solution for Pay As You Go white paper. This resource identifies possible solutions that address the challenges associated with accepting contactless open payments at gated customer points of entry within the unique retail environment of the U.S. and Canadian public transit market.
  • Canadian Card Technical Acceptance white paper. This resource provides guidance and clarification to merchants, acquirers, POS terminal vendors and POS solution integrators on application selection logic used by U.S. POS terminals to avoid certain interoperability issues when processing Canadian cards.

Find additional U.S. Payments Forum publications at www.uspaymentsforum.org and a complete collection of documents, videos, webinars, infographics, and EMV resources at www.emv-connection.com, and follow the Forum on Twitter @USPaymentsForum.

Member Recognition
Each year, the U.S. Payments Forum recognizes the top individual contributors and publishes the Honor Roll, identifying the individuals who were leading contributors and participants in the Forum projects and activities. The 2018 Honor Roll was compiled based on committee leadership, project leadership, project participation and meeting contributions from January through December 2018, with 135 members recognized as top contributors or Honor Roll members.

The full listing of the Forum’s 2018 top contributors and honor roll is available at http://www.uspaymentsforum.org/wp-content/uploads/2018/12/2018-USPF-Honor-Roll-Final2.pdf.

Next Meeting
Members of the merchant and issuing communities, as well as other stakeholders across the payments industry that are interested in having a more active voice in the U.S. implementation of emerging payments technologies are encouraged to participate in the U.S. Payments Forum’s next meeting to share their experiences and learn from their peers.

The next Forum member meeting is being held March 11-13, 2019 at the Hyatt Regency Phoenix, Phoenix, AZ in conjunction with the 12th Annual Payments Summit, held March 12-14. 2019 marks the second time the Forum will jointly hold its Member Meeting at the Payments Summit, bringing payments industry leaders from the global and domestic networks, financial institutions, merchants and processors to the premier payments event of the year, and allowing attendees to explore cross-industry business opportunities.

About the U.S. Payments Forum
The U.S. Payments Forum is a cross-industry body focused on supporting the introduction and implementation of new and emerging technologies that protect the security of, and enhance opportunities for payment transactions within the U.S. The Forum is the only non-profit organization whose membership includes the whole payments ecosystem, ensuring that all stakeholders have the opportunity to coordinate, cooperate on, and have a voice in the future of the U.S. payments industry.

Contact:
Megan Shamas
Montner Tech PR
203-226-9290
mshamas@montner.com