High conversion costs, a lack of internal expertise and the unavailability of in-house equipment to support smart card issuance are hindering the adoption of EMV standards by financial institutions, according to the latest analysis from Frost & Sullivan.
The research predicts that the worldwide banking market for smart cards will reach $1196.3 million in 2008, up from $453.3 million in 2003. But the high investment involved in the move to EMV has prevented banks and other financial institutions from implementing smart card technologies.
Jafizwaty Haji Ishahak, industry analyst at Frost & Sullivan, says: "Migrating to EMV technology would require complete convergence of existing systems with new hardware and software, incurring substantial expenses for institutions."
Furthermore, a lack of support and poor understanding of EMV amongst decision makers at the managerial level at some banks has also delayed migration to the technology.
Ishahak calls for card associations to help firms by "providing incentives to member banks to switch to smart cards, and increasing the number of smart card compatible terminals and systems".