EMV Implementation for Issuers: 7 Decisions You Must Make Before Issuing Your First Chip Card

1. Bonus Question: Will we choose contact or contactless cards?

   One obvious question that we did not include in our seven basic decisions is “Will we choose contact cards or contactless cards?” While this is a fundamental decision, it is also complex, closely linked to your institution’s business alliances and goals—and currently hotly debated in our industry. Basically, there are three chip card options.

   • Contact cards are cards with chips that come into physical contact with the device’s chip card reader.
   • Contactless cards are cards with chips that can be read by a card reader from a distance using radio frequencies.
   • Hybrid cards are dual interface cards that contain both a contact chip and a contactless chip.

   As with other decisions in this article, your organization’s choice of chip card type may be dictated by its card association membership, network participation, or even government legislation. If not, in addition to the many other business concerns driving your decision, remember to take the following into consideration:

   • Availability of devices that can use each chip card type. Determine the percentage of cardholders using your cards locally, regionally, nationally, and internationally; then assess the availability of devices that support each chip card type in each of those regions. Do ATMs support the chip cards you plan to issue? Do merchant terminals? Is your institution comfortable with chip card transactions frequently being presented as magnetic stripe transactions because of limited acceptance of your chosen chip card type by merchants or ATMs? Consider the timeframe in which your chip card type might be commonly supported, and the timeframe in which you typically reissue cards. Would it be feasible to issue one type of card initially, then replace the card with a different chip card type later
   • Risk associated with newer technologies. Your organization may want to research the type(s) of chip cards in use (particularly in the geographic area in which your cardholders are currently most active) and try to gauge the success of those programs. Weigh the benefit of gains from being an early adopter of a card type against the risk of using technologies that are not proven in your marketing area.
   • Varying costs associated with producing each type of chip card, and with obtaining the devices needed to test them. Card manufacturing costs are of primary importance, but remember that your test labs must also be equipped with ATMs and test terminals that can accept your chip card type.

Although EMV implementation is a complex process that affects your entire organization, you can begin planning EMV implementation by addressing these questions about chip card issuance.

Can Paragon Help with Your EMV Implementation?

Institutions can use simulators to begin testing EMV processing long before they have EMV devices or chip cards available for testing. Paragon solutions can simulate EMV processing by your host or financial switch, and by ATMs or POS devices. We offer a virtual “soft card” to test the processing of chip cards – including blocked applications and blocked cards – before you have chip cards available for testing. Our solutions can help you build and test ATM loads. Our simulators can also generate sufficient transaction volume to enable you to test batch processing of EMV transactions. In addition, Paragon Professional Services Team offers experienced EMV professionals to provide information and guidance as you develop your EMV implementation plan.

About Paragon Application Systems

Paragon Application Systems is a leading global provider of ePayment simulation, configuration and testing software solutions to the financial industry. More than 450 financial institutions in over 80 countries use Paragon tools to improve quality and reduce time-to-market. Paragon’s broad customer base includes major interchanges, merchant acquirers, processors, leading software providers, banks and credit unions. Visit Paragon Application Systems at www.paragonedge.com or email info@paragonedge.com.

About the Author

Deborah Spidle, a Senior Business Analyst with Paragon Application Systems, has over 20 years experience in the IT industry, focusing on banking and financial applications. Most recently, Deborah has been working as a business analysis responsible for helping a major national switch, a large bank, and multiple credit unions migrate to EMV. She has worn many hats including: development, business analysis, design engineering, program management, software implementation/installation management, project management, development management, technical writing, software installation, user testing, and client training. Deborah's managerial responsibilities have included the management of personnel across multiple disciplines (engineering, development, testing) as well as management of large, multi-functional project teams. Past clients have included financial institutions in the US, Canada, Brazil, Australia, and England.

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