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This week, MasterCard announced its plan for the migration from magnetic stripe cards to EMV chip cards in the United States. This plan is to help prepare the market for the adoption of the cards next year.

MasterCard sees the conversion to EMV chip technology as a way to prepare for the new products and services that will enhance the ways consumers make payments in the future. These include providing greater security to e-commerce and helping the growth of mobile payments. With EMV chip cards, consumers will also be able to use them to integrate loyalty program memberships and other offers to simplify the shopping experience.

"We're moving toward a world beyond plastic, where consumers will shop and pay in a way that best fits their needs and lifestyles with a simple tap, click or touch in-store, online or on a mobile device," says Chris McWilton, president, U.S. Markets, MasterCard, in a press release. "Our roadmap represents a transformational shift in the approach to payments and is not simply about EMV, chip and PIN. We're focused on readying the ecosystem to drive future innovation and provide new consumer experiences to enhance the value of electronic payments."

To that end, MasterCard has set a plan, with EMV as the basis for the next generation of payments.

Its first focus is the acquirer infrastructure. Acquirers function as the middlemen in the card network. In this case, they're licensed members of MasterCard. They recruit merchants to accept MasterCard and then work with both the merchant and the bank that issued the card to authorize transactions. In order to accept the EMV technology, acquirers will need to obtain the infrastructure that's capable of reading the chip. MasterCard intends for its acquirers to have that infrastructure in place by April 2013.

In other aspects of its roadmap, MasterCard plans on giving consumers more control in terms of security and cardholder verification. With the EMV chip's greater security, it's hoped that its implementation will reduce fraudulent transactions.

In terms of implementing the machinery necessary to fully roll out the acceptance of EMV chips, MasterCard also plans to provide financial benefits to merchants as they invest in upgrading to EMV-compatible terminals.

MasterCard also wants to make sure it covers all types of MasterCard interactions, including those at ATMs, in-store, online and mobile commerce.

Finally, as one of the companies originally behind the EMV standard, MasterCard plans to encourage industry collaboration to help bring this system to the United States.

"Customers from across the payments ecosystem have been asking for a roadmap," says McWilton. "We believe we've provided issuers and merchants with a vision to 'future proof' their businesses and the flexibility to manage their technology decisions to best meet their goals and priorities."

As transaction technology advances, it will incorporate a feature called dynamic authentication. This feature will apply unique information to every transaction made with a card so that it's very difficult to replicate the card information in order to use it for fraudulent purposes. As issuers upgrade the cards and merchants install the terminals to read them, dynamic authentication technology will be able to be implemented, helping to reduce fraud.

"As the industry invests in the upgrade to EMV in the U.S., we now have the ability to enhance the consumer experience and the security of a payment, regardless of the device--contactless card, mobile, e-commerce and technologies still to come," says Ed McLaughlin, chief emerging payments officer, MasterCard.

"The shift to dynamic data in the transaction process will help ensure greater consistency, security and functionality between the U.S. region and the rest of the globe," says George Peabody, director, Emerging Technologies Advisory Service, Mercator Advisory Group.

MasterCard's roadmap comes several months after Visa launched its EMV initiative. Visa's plan for migration to the EMV card technology, announced in August 2011, includes expanding its Technology Innovation Program to merchants, establishing an EMV chip processing requirement for U.S. acquirer processors and creating policies around counterfeit liability.