Visa just announced the launch of its online toolkit to educate business owners on the benefits of chip technology. This comes amidst Visa's 20 state tour to promote the new EMV technology. But Visa isn't telling businesses that it refuses to implement "chip-and-PIN" technology which provides much greater security than "chip-and-signature" cards.
Unlike the credit cards currently being issued in nearly every other G-20 nation, including Canada and Europe, U.S. consumers will be issued by Visa "chip-and-signature" cards rather than "chip-and-PIN" cards. While the use of a chip serves as a much more secure way to store personal data, the usage of a traditional signature can be easily exploited and does not protect against lost or stolen card fraud.
A "chip-and-PIN" card would require the use of a four-digit personal identification number or PIN, similar to present-day debit card transactions. By combining these two security features, "chip-and-PIN" cards have drastically reduced fraud in other countries.
Instead of a public relations campaign, Visa should stand with retailers and support the implementation of "chip-and-PIN" cards, which will give American consumers the level of protection they expect and deserve.
These Are Called "Chip and PIN" Cards, But The "PIN" Factor Is A "Misnomer" In The United States. "The PIN part of 'chip and PIN' is something of a misnomer. In the rest of the world, when people buy with a credit card they dip their card in the reader and then input a Personal Identification Number, or PIN, much as Americas do when we use cash machines. Here, most banks are issuing cards that allow a signature, rather than a PIN, as confirmation." (Elizabeth Weise, "Coming To A Shop Near You: Chip And PIN Cards," USA Today, 1/6/15)
Ending the usage of signatures and migrating to PINs would make cards much more secure. In fact, the Federal Reserve found that PIN debit transactions were up to 700 percent safer than those made without a PIN. ("2011 Interchange Fee Revenue, Covered Issuer Costs, And Covered Issuer And Merchant Fraud Losses Related To Debit Card Transactions," Federal Reserve, 3/5/13)
In addition, "chip-and-PIN" cards are already in wide use around the world and in nearly every G-20 nation. In the United Kingdom, they have helped cut fraud at retailers by 67 percent. ("EMV: FAQ," Smart Card Alliance, Accessed 3/9/15)
Visa And MasterCard Join Other Big Banks And Card Companies In Refusing To Implement PIN Technology, Leaving Customers Vulnerable. "This year, firms ranging from J.P. Morgan Chase & Co. to Discover Financial Services Inc. are expected to roll out more than a half-billion new credit cards embedded with computer chips that create a unique code for each transaction, making counterfeiting much more difficult. In a retreat for the industry, however, the new cards don't use some technology that could prevent fraud if a card is lost or stolen. Instead of requiring customers to put in a personal identification number, or PIN, the new cards need users to authenticate credit-card transactions the same way they often do now, with a signature. PINs are widely considered to be more secure than signatures, which can be easily copied." (Robin Sidel, "Why New Credit Cards May Fall Short On Fraud Control," The Wall Street Journal, 1/4/15)
Customers Really Want To See "Chip-And-PIN" Payment Cards Introduced In The United States. Eighty-two percent of cardholders are supportive of "chip-and-PIN" and 52% said they would switch banks for "chip-and-PIN" cards. (Chip & PIN Security Now! November 2014)
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.