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Communicating Effectively

EMV/Chip Card Transition –Planning ahead for a holistic cardholder communication strategy when migrating to EMV/chip cards

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Executive Summary

As reports of fraud increase in the United States, and the deadline of October 2015 for liability shift, many financial institutions are shifting to EMV/chip cards. While chip cards provide an added level of fraud protection and convenience, many cardholders are not fully aware of the advantages and exhibit confusion and reservations, which can lead to cardholder erosion. However, by creating a thorough communications strategy, institutions can alleviate cardholder confusion and improve retention while reducing fraud losses. This paper will provide key messaging recommendations, timing and channel considerations in order to aid cardholder adoption.

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Section 1 – Understanding Your Cardholders

Consumers have many misconceptions about chip cards. Of U.S. consumers, 61 percent are concerned that chip cards will increase the risk of fraud1 — when in fact the technology reduces fraud. This is a clear indication that cardholders need education about chip card benefits.

In addition to alleviating cardholders’ worries about fraud, institutions must communicate ease of use. Nearly 30 percent of cardholders are uncertain whether their chip card will be easy to use.1 More than 68 percent are concerned that their transaction may not process or process the correct amount .1

Recognizing cardholders’ apprehensions will help institutions frame messaging that alleviates concerns. Additionally, remaining proactive across channels and developing messaging around emerging cardholder issues will help reduce friction in the implementation of chip card technology.

1Sources: Security Matters survey of 1,011 randomly selected Americans (May 2014), PwC social media listening

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Section 2 – Effective Messaging How to effectively communicate your message to your cardholders

It is important that messaging about chip cards is provided in cardholder-friendly language, as opposed to industry terminology. For example, referring to a card as “EMV” provides no context for the cardholder. However, by using the term “chip”, the cardholder immediately has a frame of reference to this advanced technology, as the term is familiar from use of computer chips. Including visuals in messaging is also recommended. Supplying pictures and imagery of where the chip is placed on the card further helps to demystify this technology for the cardholder.

When communicating with cardholders about chip cards, the institution should establish trust by making use of brand logos and trademarked terms to convey a sense of authenticity. By building this trust, the institution can ease cardholder concerns of fraud from an unauthorized party. Next, remain consistent with the brand voice. Finally, communicating with a friendly, reassuring, considerate tone is critical to avoid overwhelming or demeaning the cardholder.

In addition to these overarching guidelines, the following four components should be incorporated in communications:

1) Provide cardholders with clear instructions on how to operate their chip card. Provide linear, step-by-step instructions and use pictures or video depending on channel distribution. Make it clear that the card is inserted in the terminal/ATM (rather than swiped) and must be left in the terminal/ATM until the PIN is entered. The transaction enters the authorization process and (if successful) the sale/transaction is approved; the cardholder will see no difference in the purchase process.

In-Store

ATM

Card Card Card Card

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Section 2 – Effective Messaging (cont.)

2) Convey technology features and added security benefits. In order to ease cardholder concerns around fraud, it is critical that messaging highlights additional security, such as fraud protection including dynamic encryption on each transaction. Including sample images that illustrate where the chip will appear on the new card gives an indication of what to expect once the new card arrives. Additionally, this demonstrates how the technology and security work together to protect cardholders.

Enhanced Security

• The security Chip Technology provides has been used globally for the last decade and is proven to reduce counterfeit fraud.

• Chip Cards provide better fraud protection than traditional cards when used at a chip enabled terminal. They have an embedded microchip that turns cardmember information into a unique code, making it difficult to duplicate

3) Communicate the ease of use. Place an emphasis on the simple, dual functionality of chip cards. Cardholders may not be aware that chip cards also contain the traditional magnetic strip. It should be communicated to cardholders that even if a merchant does not have a chip terminal, they can still use the magnetic strip on the card. Finally, assure cardholders that the process for conducting transactions online and over the phone will not change.

4) Convenience of global acceptance when traveling. For international travelers, traveling with ease and global acceptance is an added benefit. First introduced 20 years ago, chip cards have been deployed world-wide and are now accepted in the U.S. and more than 130 other countries.

Helpful “EMV Chip Tips” for international travelers

1. At the restaurant

2.O� the beaten path

3.Shopping in Town

4. In the train station

1. At the restaurant

2.O� the beaten path

3.Shopping in Town

4. In the train station

1. At the restaurant

2.O� the beaten path

3.Shopping in Town

4. In the train station

1. At the restaurant

2.O� the beaten path

3.Shopping in Town

4. In the train station

At a Restaurant Safer to use since your credit card never leaves your possession. The chip terminal is brought to you for transactions.

Off the Beaten Path There’s no PIN needed. Just sign the receipt.

Shopping in Town Your Chip Card is simple, easy and convenient.

In the Train Station Travel abroad with ease using Chip Technology.

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Section 3 – Appropriate Timing of Messaging When to communicate with cardholders – timing is everything

• In order to appropriately reach consumers and disseminate information with effective messaging, institutions should plan early, communicate often, and repeat with consistent messaging and tone across multiple channels.

• Pre-Launch

• 60 to 90 days before launch – Communicate general awareness. Over 60 percent of Americans do not know when to expect a chip card from their institution, so clear communication around what to expect is important. These materials should provide cardholders notification that chip cards will be coming and highlight the benefits. Awareness occurs in multiple cardholder channels (both online and offline) simultaneously. An awareness communication plan will be extensive, as it requires message repetition across channels. Communications should always provide resources for cardholders to contact for more information should they have questions.

• 30 days prior to launch – Institutions should distribute additional pre-issuance notifications highlighting the benefits of the chip card. The institution should reiterate the benefits as well as card activation instructions. These communications should be sent through mail and email and should continue to include additional resources for cardholders who may have questions.

• Launch

• Day 0 – Once an institution issues chip cards to cardholders it is important to provide them with simple, detailed information about: (1) how to activate the card, (2) how to use the card, and (3) the benefits of the card. As always, communications should contain sources cardholders can access for additional information.

• Post-Launch – Even after cards have been issued, on-going communication should continue through 90 days after launch. Maintaining attentive call centers and active social presence is crucial to post-launch success. Additionally, through social listening an institution can quickly identify cardholder pain points and proactively address concerns.

• 10 days after launch – For cardholders who have activated their cards, send an email to encourage them to confirm their online account information including alerts and bill pay details.

• 14–21 days after launch – Tailor communications to those who have not activated their new card. Cardholders may not have read the communications or could be apprehensive about activation. Send targeted messaging that acknowledges an inactive chip card through email, mail, or a phone call and reinforce the security benefits and ease of use. This communication should offer assistance and additional activation instructions.

• 30–40 days after launch – If the card is active, but amount of the cardholder’s transactions are lower than their past behavior, initiate communication through email or mail to encourage use. Transaction hesitation may be a result of skepticism around chip security, purchase confusion, or overall difficulty with usage. Reiterate security benefits, ease of use and additional resources available for questions.

• 75–90 days after launch – Perform review of cardholders who are still using old non-chip cards either fully or partially. While cardholders may be aware of the benefits of the new chip card, they may not be aware their old card will be deactivated. Reaching out to cardholders through email or phone explaining the approaching deactivation will help educate the cardholder. This may also aid to prevent frustration in the future, should they try to complete a transaction after the card has been deactivated.

• 90 days after launch – Send all cardholders communication informing them that their old card will be deactivated.

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Section 4 – Appropriate Messaging Placement Reaching your cardholders through the right channels

Not every cardholder will access information through the same means; nor will content exist in isolation. Leveraging multiple distribution channels is essential to reach cardholders in their most familiar and comfortable mediums. Remember cardholders engage with multiple channels, so maintaining an integrated message and branding consistency is critical. Using universal language among different sources prevents confusion and ensures cardholders receive the intended message.

Online Channels

• Website – Making note on the institution website, microsite, or specific vanity URL indicating that new chip cards will be coming creates mass awareness. Additionally, placing a notification after cardholder account log-in page is a powerful way to communicate the chip card notifications. The presence of these messages on the institution’s site reassures uncompromised information and completes a validation circle that legitimizes the communications sent to cardholders. Mail, email, video, social media, and in-branch collateral may guide cardholders to the institution’s website or designated page for additional information. This also contributes to the legitimacy of the channel content—reassuring the cardholder that the communication itself is not fraudulent.

• Email – Supplying cardholders with consistent communication through email acts as a way to reinforce message delivery. A well-maintained email program provides a quick, cost-efficient way for institutions to share important information about chip cards. The most effective campaigns are heavy with images, but light on text. Email is a valuable gateway to direct cardholders to the channels they use most often (website, social, and video). Together it creates a comprehensive and consistent communication path for cardholders.

• Social Media – While social media acts as a powerful communication tool to broadcast messages to cardholders, it operates as a two-way model. This channel allows cardholders to post questions, share their experiences and voice their frustrations. It is not enough to simply send information via social media. Institutions should expect cardholder feedback. Social media should be closely monitored and institutions should be willing and ready to respond. This open communication with the cardholder provides an honest exchange. Providing responses can alleviate frustrations, educate cardholders, reinforce chip card benefits and contribute to card activations and use.

• Video/Commercials – Institutions frequently embed videos within their website and link to the hosting source (e.g. YouTube). Videos contain messaging that demonstrates chip card benefits, how they work and instructions for use. For larger institutions, commercials may be leveraged as a way to reach mass audiences.

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Section 4 – Appropriate Messaging Placement (cont’d) Reaching your cardholders through the right channels

Offline Channels

• Direct Mail – Sending information through mail allows cardholders to have tangible information to refer to should questions arise. While an expensive channel, this format of communication is still important. However, short, simple links directing cardholders back to the institution webpage make it easy to follow, confirm authenticity and access other messaging formats (such as videos).

• Statement Insert – Providing chip card literature within statements is an inexpensive way to communicate necessary card information to cardholders. These materials are sent specifically to those cardholders with checking or savings accounts that are linked to their debit cards. Statement inserts usually contain a short, simple call to action.

• IVR (Interactive Voice Recording) – Another economical and common communication channel is through a phone IVR system. An IVR can be used as a placeholder between loading phone navigation menus or while the cardholder is on hold.

Other

• In-branch – Communications in-branch offer an opportunity to provide cardholders with large visuals or even demonstrations. It is important to also ensure employees are properly educated so they can assist cardholders.

• Contact Center – Contact center employees should also receive in-depth education and training around assisting cardholders with chip card questions. Since they do not have the benefit of being in person, it is important contact center employees have a copy of the communications sent to cardholders so they can reference the same materials.

• ATM – Displaying a message to cardholders at the end of their ATM transaction is a way to confirm those who use a PIN are receiving the chip card notice. Additionally, a best practice is to provide an option to print or have the institution email them more information.

• FAQ – Providing cardholders answers to current or anticipated chip card questions is a helpful way to educate cardholders, alleviate frustrations and point them in the right direction. Typically, FAQs use casual and conversational language. For consistency and cost-efficiencies, FAQs can be shared across multiple channels both offline (e.g. in-branch brochures) as well as online (e.g. website FAQ section).

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Section 5 – Conclusion

The transition to chip cards may be daunting for institutions and cardholders. While chip card technology has been used for a decade in countries across the globe, it is still a new concept to U.S. cardholders—leading to many misconceptions. Implementing a comprehensive cardholder communication plan across multiple channels is critical to a successful chip card migration. Utilizing this paper as a resource, institutions will have the essential framework necessary to launch a chip card program, encourage activation and maintain current cardholder transaction levels.

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About PULSE InSightsAt PULSE InSights, we turn knowledge into tools and processes for improving performance. Our knowledge comes from more than 30 years of debit experience in helping financial institutions meet their goals. Together with West Monroe Partners, we have a team of advisors that delivers the ability to effectively analyze performance amidst the challenging backdrop of regulatory change, stiff competition, fraud, interchange compression and constant technological evolution.

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Annette Harris

832.214.0172 annetteharris@pulsenetwork.com

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