In an effort to tap the emerging contactless payments market,
American Express Company
) is moving to EMV (Europay, Mastercard and Visa) chip-based
technology. The company plans to begin issuing EMV-compliant cards
in the U.S. in the latter half this year. The new offering is
expected to benefit its cardholders in U.S., ranging from merchants
and processors to the issuers.
AmEx is slated to work in coalition with other industry players
to bring about "interoperability" not only across the U.S. but also
in other countries. The company hopes to improvise and support
chip-based technology, thus aiding "chip and PIN, chip and
Signature, contactless and mobile transactions."
The company has chalked out its requirements in three stages
that will be executed over the next couple of years. By April
2013, AmEx intends to install processors that will support its EMV
chip-based contact, contactless and mobile transactions. Following
this, in October 2013, the company will facilitate its merchants
with PCI Data Security Standard (DSS) at the point-of sale where
75% of its transactions take place, which will be eligible for
processing through AmEx's EMV technology.
The company also plans to introduce a Fraud Liability Shift
policy to safeguard the interests of both the merchants and AmEx
cardholders by October 2015, allowing a time frame of two years for
Over the years, AmEx has been striving towards the
implementation of innovative technology. With the Serve payment
service already to its credit, it extends its leadership into the
rapidly growing person-to-person (P2P) mobile payment platform.
The company has also initiated many strategic alliances with
Bank of China,
) and initiated a number of inorganic expansions to improve its
AmEx's prime competitors,
), are equally proactive when it comes to the implementation of the
latest technologies. MasterCard has initiated talks with C-SAM, a
non-U.S. based provider of turnkey solutions to bring a White Label
Mobile Wallet solution, whereas Visa recently came out with an
innovative online payment management tool for small businesses as
it unveiled the Visa Payment Controls.
AmEx currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We also retain our long-term Neutral
recommendation on its shares.
AOL INC (AOL): Free Stock Analysis Report
AMER EXPRESS CO (AXP): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.