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The traditional financial services market is rapidly changing. Telecom operators, retailers and insurance companies are starting to erode the banking community's business, luring customers with mobile payment offers, branded credit cards and online banking. If the banking community is to defend its business, it must be armed with the latest technologies and services to keep pace with their competitors.
In 1994 Europay International, MasterCard International and VISA International initiated the development of specifications for the microprocessor cards known as EMV standard. EMV is a set of global specifications for cards, terminals and applications intended for proceeding worldwide smart card transactions. The main purpose of the initiative was to reduce the risk of fraud that affected many business activities using mag-stripe cards.
Today EMV migration is a key solution that empowers banks to meet today's challenges and gain unique advantages of microprocessor technologies:
- Considerable reduction of fraud;
- Using several applications on the same card like electronic purse and loyalty program;
- Reduction of telecommunication expenses;
- Increase of credit risks management efficiency.
EMV migration is highly recommended by International Payment Systems and affects all the key banking subsystems:
- Cards issuance;
- Terminal hardware & software;
- Front-office;
- Back-office;
- Clearing & settlement.
Since the cost of technology is decreasing, smart cards will permeate every aspect of business and consumer lives: from ID cards to e-wallets and public transport systems. In the conjuncture of crowing competition and necessity of EMV migration bank faces perhaps the most important challenge – choosing the proper development and promotion strategy of new banking products.
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