Three in four debit cards to feature EMV chip by 2016
One-third of all debit cards featured a chip by the end of 2015
One-third of all debit cards featured a chip by the end of 2015, while three in four debit cards is expected to be chip-enabled by 2016 end, according to a latest study by Pulse, a Discover Financial Services company.
Titled ‘the 2016 Debit Issuer Study’, the new report takes stock of the debit industry’s shift to chip (EMV) cards and mobile payments as a result of the October 2015 liability shift that marked a key milestone for issuers’ transition to chip card technology.
Almost half (45%) of issuers had started issuing chip debit cards by the end of 2015; however, it is much lower than the 90% of issuers that indicated in the prior year’s study that they expected to have chip cards in the market by the end of 2015.
When considering all debit card transactions, chip debit transactions accounted for only 4% of total debit transactions. This is largely due to the slower-than-anticipated pace of merchant adoption, which limited the use of chip cards at chip-enabled terminals.
Even among consumers using chip debit cards, only 11% of their chip card transactions were at chip-enabled terminals while the rest 89% were processed as traditional magnetic stripe checkouts or online.
However, the study noted that chip debit transactions are growing at triple-digit rates year-over-year.
The study highlights that mobile payments is gaining traction but usage is limited. It revealed that two-thirds of issuers had debit cards eligible to be loaded into a mobile wallet by the end of 2015.
The previous Debit Issuer Study found less than one-third had that capability, indicating a year-over-year increase of more than 100%.
Pulse executive vice president of marketing and communications Steve Sievert said: “In this sea of change, core debit performance metrics remain strong, with debit use growing with each installment of the study.
“This year’s results provide key facts behind the shift to chip debit cards and mobile payments, two of the most significant developments within the payments industry.”