EMV Implications in the Commercial Card Market

Navigator Edition: October 2015
By: Patrick Gillece and Jenny Yi

Much of the attention surrounding the October 1 EMV liability shift deadline has focused on consumer card issuers and retailers. Commercial card issuers have also been affected by the liability shift, but to a somewhat lesser degree–not because the liability shift wasn’t a significant event, but because many large issuers were earlier adopters of EMV cards than most of their consumer counterparts. This early adoption has primarily been the result of competitive pressures unique to the commercial card market, which have influenced the decisions that issuers have made with regards to both migration timelines and EMV technology.

As with consumer card issuers, commercial card issuers have been motivated, in part, to adopt EMV compliance by the liability shift. For many large issuers, though, competitive pressures to offer EMV cards have pre-dated the recent liability shift push. For example, due to the high frequency of international travel on commercial cards relative to consumer cards, many large commercial card issuers began to provide EMV-enabled cards years ago. To further accommodate these frequently traveling cardholders, most large issuers adopted chip and PIN cards (many with offline PIN capabilities), as opposed to chip and signature, facilitating a better acceptance experience for business travelers. Additionally, in October 2014, President Obama issued an executive order requiring government payment cards to adopt chip and PIN technology, which drove the replacement of 3 million GSA SmartPay cards. As seen in Figure 1, as early as April 2014, seven out of the top ten commercial card issuers were already offering EMV chip & PIN cards. Currently, the majority of the top-20 commercial card issuers are chip and PIN.

Figure 1: EMV Adoption Among Top U.S. Commercial Card Issuers
(by combined corporate + purchasing card spend volume)

Fig-1_EMV-Adoption-Among-Top-US-Commercial-Card-IssuersSource: The Nilson Report, American Express annual report, issuer websites, press releases, and First Annapolis Consulting web research as of October 2015.

While a large majority of consumer credit cards have adopted chip and signature cards, conversely a majority of commercial card issuers appear to prefer chip and PIN. Going forward, we expect chip and PIN to continue to be the predominant EMV technology for commercial cards.

For more information, please contact Patrick Gillece, Consultant,; or Jenny Yi, Associate, Both specialize in Commercial Payments and Bankcard Issuing.

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