Card networks and merchants have had an adversarial relationship over the past 10 years. This has obstructed the deployment of more secure and convenient payment technologies at the point of sale, including EMV "smart cards," mobile wallets equipped with Near Field Communication (NFC) technology, and contactless cards. Merchants have gone their own way on mobile wallets, preferring Quick Response (QR) Code-based mobile wallets to the NFC-based mobile wallets championed by the networks, banks, and mobile device manufacturers. Online retailers, for their part, complain that EMV has merely shifted fraud from the physical point of sale to the e-commerce site.
The research report, EMV Technology Update: EMV Classic, Faster EMV, and Now QR Code EMV, goes into detail on how these technologies work, and what card issuers need to do to ensure that EMV QR codes meet a friendlier reception than other network-backed standards.
"EMV got off to an extremely rough start in the United States," comments Tim Sloane, Vice President, Payments Innovation and author of the report. "While the networks were able to improve the EMV experience by streamlining the process flow, a considerable amount of ill will built up, endangering the reception of a technology that normally merchants would welcome, since it greatly resembles the technology they themselves have adopted. Concentrating on the major pain point of e-commerce fraud would help give EMV QR Code the best chance of success, along with applicability in countries where the point-of-sale infrastructure is underdeveloped relative to the availability of mobile phones."
Highlights of the research report include:
- A brief history of efforts to improve the security and customer experience at the point of sale
- Detailed process flows for EMV, "quick" EMV, and consumer-presented and merchant-presented EMV QR Code
- Analysis of why NFC has not taken off in the United States and what might be done to change this
- Recommendations on how EMV QR could best be brought to market.
1. Executive Summary
3. How EMV Reduces Fraud
4. The Process Flow of an EMV Classic Transaction
5. Early Attempts to Speed Up EMV
6. The Faster EMV Transaction
7. Introducing the QR Code Acceptance Methods
- The Consumer-Presented QR Code Model
- The Merchant-Presented QR Code Model
List of Figures
Figure 1: The original EMV card standard sequence is secure but slow
Figure 2: Faster EMV no longer requires card to evaluate the bank’s response
Figure 3: Process for EMVCo payment systems consumer-presented QR Code model
Figure 4: Process for EMVCo payment systems merchant-presented QR Code model (push pay)