The payments industry has evolved considerably in recent years. A combination of consumer demand and technological innovation continues to impact how transactions are initiated and processed. Merchants have had to deal with the constantly changing face of point-of-sale, while banks have had to invest in the infrastructure and processes to support the increasing volume of electronic payment transactions. With contactless and mobile offering the next wave of opportunity, attention is also focused on keeping pace with innovation and achieving competitive advantage.
The US market in particular has faced some tough challenges. Those across the payments ecosystem, including merchants, integrators, Value-Added Resellers (VARs) and processors, have had to contend with business downturns, the ongoing controversy over interchange fees and increased regulations. One example is the Durbin Amendment, which created waves across the market by capping interchange fees and seeking to increase competition in the processing of payments.
Against this backdrop, the US payments sector now has a plan in place for the migration from magnetic stripe (mag-stripe) cards to EMV. EMV is a global standard for credit and debit payment cards based on Chip card technology, covering the processing of credit and debit card payments using a card that contains a microprocessor chip at a payment terminal.
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