Abstract
EMV Migration in Canada: Opportunities and Challenges, 2007 is the most comprehensive and authoritative independent strategic analysis and forecast available on the Canada' s EMV migration program. It includes a detailed analysis of the Canadian payments landscape and establishes the payment context in which EMV migration will take place. The 115 page report analyses the most important opportunities and threats facing EMV migration in Canada, and identifies the key challenges that will need to be addressed by issuers, acquirers and different classes of merchants for migration to be successful. Detailed forecasts are presented for the migration of credit and debit cards, POS terminals, ABMs and automatic fuel dispensers to EMV. Based on interviews with more than 55 key executives in the industry, as well as extensive secondary research, this detailed report is an essential reference document for organizations both within Canada and around the world involved in planning, implementing, or supplying goods or services to EMV migration programs.
Why buy this report:
Subscribers to this study will gain an understanding of the dynamics of the complex EMV migration process, its impact on different types of participant, from consumer, to merchant, to card issuer, to acquirer, and how different issuer choices impact on EMV migration costs and influence the future direction of the market. They will have essential information on the needs of different categories of stakeholder in the migration process, on market prospects and opportunities arising from EMV migration, important trends, key drivers and critical issues affecting migration. Subscribers will be able to make well-founded, research-based, strategic decisions about the planning and implementation of successful EMV migration programs.
Who should buy this report?
This report is essential reading for senior executives from the following types of organizations:
Card issuers, acquirers, integrated merchants, small retailers, ISOs, payment organizations and any other organizations that are likely to be affected by the Canadian EMV migration program. They will have an authoritative, independent and unbiased view of EMV migration in Canada that will assist them in their EMV migration planning and implementation Suppliers of smart cards, point-of-sale terminals and card acceptance devices, ABMs and automatic fuel dispensers, NFC devices, software and middleware that are keen to succeed in the Canadian marketplace Professional services and consulting firms that are able to leverage their international experience base in EMV migration through providing services to the lucrative Canadian market, a market that is suffering from a severe skills shortage for the implementation of EMV Policy makers, financial institutions and suppliers from other countries and jurisdictions that are considering, planning or implementing EMV. They will have access to well-founded, independent comparative information that will inform their own thinking about EMV migration
Market summary
- The investment required to migrate to EMV will exceed $1 billion
- By 2010, the date set by Visa Canada for the liability shift between issuers and acquirers in Canada, only 36% of all credit cards in Canada will have migrated to EMV-compliant smart cards
- The number of payment cards in Canada will exceed 132 million units by 2011 (including smart cards and magstripe cards)
- There are a number of important opportunities for convergence with EMV-based payment applications emerging on the Canadian market, most notably in the areas of transit and loyalty
- There is significant potential for credit card payments to be displaced by debit card payments as a result of the introduction of chip and PIN payments in Canada
- Most retailers have not been engaged in the EMV migration planning process and are likely to resist migration when the cost and business process implications of migration become clearer to them
- Petroleum product retailers will have to incur substantial costs in order to upgrade their automatic fuel dispensers to accept chip and PIN debit and credit card payments
- The introduction of chip and PIN for credit cards will have some significant implications for consumers and is likely to reduce the number of payment options that consumers use on a regular basis
- White-label ABM owners will have to incur substantial costs in order to upgrade their equipment to accept EMV-compliant payment or banking cards.
- EMV migration will be slower than anticipated because of the numerous challenges facing issuers, acquirers, merchants and white-label ABM owners
- Wireless payments is an important growth area that may overtake the planned rollout of EMV contact smart cards
Research Methodology
The report is based on interviews with 56 key-decision-makers and experts from Canada and globally, supported by extensive desk research, TSI' s own internal databases on the Canadian and global smart card markets, and TSI' s expert analyst insight.
Number of Interviews by Sector
- Sector:Financial Services, (20)
- Sector:Retail (15)
- Sector:Suppliers (6)
- Sector:Associations, Consultants and Industry Experts (5)
- Sector:International Experts(5)
- Sector:Other(5)
Table of Contents
EXECUTIVE SUMMARY
INTRODUCTION
- Objectives of the Study
- Research Methodology
- A Note on Forecasts
- Currency
- Acknowledgements
THE EVOLUTION OF PAYMENTS IN CANADA
- Introduction
- The Payments Landscape in Canada
- Cash Payments
- Debit Card Payments
- Credit Card Payments
- Cheques
- Online Payments
- Canadian Payments in Perspective
THE HISTORY OF CHIP CARDS IN PAYMENT SYSTEMS IN CANADA
- Stored-value Cards
- The Mondex Guelph Pilot
- The Exact Pilot in Kingston
- The VisaCash Barrie Pilot
- The Mondex Coup
- Mid-Course Correction
- The Mondex Sherbrooke Pilot
- Dexit
- IMVCCP
- CCMP
EMV MIGRATION
- EMV Overview
- CCD and CPA50
- Processes in a Typical EMV Transaction
- SDA, DDA and CDA
- Cardholder Verification
THE CASE FOR EMV MIGRATION IN CANADA
- Fraud as a Key Driver
- Credit Card Fraud
- Debit Card Fraud
- Securing and Modernizing the Payments System
- Keeping up with International Developments
- Multi-application Cards and Future Functionality
- EMV Migration Challenges
- Issuers
- Acquirers
- Merchants
- Merchants Views on EMV Migration
- Terminal Infrastructure
- POS
- ABMs
- Automatic Fuel Dispensers
- The Impact on Consumers86
IMPLEMENTING EMV IN CANADA
- Overview
- Timelines for EMV Migration
- The Kitchener-Waterloo Trial
- Assessing the Investment Required
- Migration Window
- Wireless Payments
- Migration Forecast
- The Supply Structure
- The Payment Systems Value Chain
List of Figures
- Canadian Retail Sales by Sector (2005)
- Average Annual Growth in Retail Sales by Sector (2001 - 2005)
- Canadian Banknotes and Coin in Circulation
- Number of ABMs in Canada by Type
- Volume and Value of Cash Withdrawals at ABMs in Canada
- Cash-based Retail Payment Transaction Volumes in Canada
- Annual Volume and Value of Interac Direct payment Transactions
- Debit Card Payment Transactions by Sector
- Share of Number of Transactions at Retail Outlets (1996 - 2005)
- Share of Transaction Values at Retail Outlets (1996 - 2005)
- Number of Visa and MasterCard Credit Cards Issued in Canada22
- Net Retail Dollar Volume and Transaction Volumes (Visa & MasterCard)
- Relative Shares of Visa and MasterCard in Canada
- Number of Merchant Outlets Accepting Visa and MasterCard
- Volume and Value of Cheques Cleared through the ACSS in Canada
- Share of Personal Consumption Expenditure (PCE) by Payment Type in Canada
- Payment Transaction on PCE by Payment Instrument
- Consumer Preferences for Payment Method
- EMV Transaction Flow
- Credit Card Fraud in Canada
- Credit Card as a Percentage of Retail and Cash Advance Dollar Volumes
- Breakdown of Credit Card Fraud by Type (2005)
- Credit and Debit Card Fraud in Canada
- Forecast Number of Credit Cards in Circulation in Canada
- Forecast of Credit Cards Issued Annually in Canada by Type
- Forecast Number of Debit Cards in Circulation in Canada
- Forecast of Debit Cards Issued Annually in Canada by Type
- Forecast of EMV Cards Issued Annually in Canada
- Forecast of Installed Base of POS Terminal in Canada
- ABM EMV Migration Forecast in Canada
- Interlinked Value Chains: Payments
List of Tables
- Number of Interviews by Sector
- Debit Card payments by Retail and Business Sector
- Primary Issuers of Visa and MasterCard in Canada
- Key Features of the Mondex Guelph Pilot
- Key Features of the Exact Kingston Pilot
- Key Features of the VisaCash Barrie Pilot
- Key Features of the Mondex Sherbrooke Pilot
- EMV 4.1 Structure (EMV 2000)
- EMV Compliance Assessment in Europe (mid-2006)
- Summary of Merchants' Perspectives on EMV Migration
- Key Features of Payment Organization EMV Migration Policies in Canada
- Interac' s EMV Migration Targets
- Visa' s Liability Shift
- Attributes that make Kitchener-Waterloo an Attractive Trial Location
- Number of Retail and Service Establishments by Sector
- Canadian EMV Investment Requirements
