Of Special Interest


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12th August 2011

Visa to chip its cards in the US

Visa announced that it was accelerating the migration to EMV Contact and Contactless chip technology in the United States.

"By encouraging investments in EMV contact and contactless chip technology, we will speed up the adoption of mobile payments as well as improve international interoperability and security," said Jim McCarthy, global head of product, Visa Inc. "As NFC mobile payments and other chip-based emerging technologies are poised to take off in the coming years, we are taking steps today to create a commercial framework that will support growth opportunities and create value for all participants in the payment chain."

The benefits of reduced fraud were also highlighted, "Dynamic authentication is the key to securing payments into the future," said Ellen Richey, chief enterprise risk officer, Visa Inc. "Adding dynamic elements to transactions makes account data less attractive to steal and takes more merchant systems out of harm's way, shrinking the battlefield against criminals. The migration to chip technology will be an important security layer and a critical step in a comprehensive strategy to use dynamic authentication across all markets and all channels."

Visa has kept open the option of signature verification in the US, thus creating the potential for significantly higher fraud levels than in Europe where with a few exceptions only, PIN verification is required. Visa is using both carrot and stick with merchants. It mentions the possibility in the longer term that if merchants do not acquire the chip card processors then fraud liability may fall more heavily on them rather than the card issuer. Visa states that it new digital wallet will have a "Click to Buy" function to support secure Cardholder Not Present (CNP) transactions.

"There is no security silver bullet. But smartcards and smartphones using EMV adds a strong layer for payment transaction security as well as online banking, access to medical records and more," said George Peabody, director, Emerging Technologies Advisory Service, Mercator Advisory Group, Inc. "The roll-out of EMV in the U.S. gets much needed dynamic data into the authentication mix. This is a welcome step toward lowering fraud at the point of sale and online. It's time."