17 January, 2012 - 10:55

Visa: US EMV move doesn't mean chip and PIN

Following its decision last year to push the adoption of EMV in the United States, Visa has moved to clarify that this does not mean the introduction of chip and PIN cards.
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In August Visa set out a roadmap for the US adoption of EMV, largely to help prepare the country for the impending widespread arrival of NFC-enabled mobile payment devices.

In a blog post, Stephanie Ericksen, head of authentication product integration, says the company has received a lot of support from industry players for its stance but also a lot of questions.

"One thing that's clear from the questions is that there's a lot of confusion around the myth that EMV means "chip-and-PIN." It doesn't in many countries, including the US. That's because, in the US, we can rely on online processing where transactions are transmitted in real-time to the issuer for approval. With that in place, there's no need for the offline authentication that was the genesis of chip-and-PIN," says Ericksen.

Meanwhile, adoption of EMV as the universal payment standard gained further traction in 2011, with official figures revealing that over 42% of all payment cards and nearly 76% of terminals in circulation globally are based on the technology. Today, there are over 1.3 billion EMV payment cards in global circulation and more than 20 million terminals active worldwide, according to EMVCo.

Added: 17 January, 2012 - 16:30 | Nick Green - ISD Consultants - Northampton

Oh Dear - more half measures. Visa US running scared.

Added: 17 January, 2012 - 18:14 | Nick Collin - Collin Consulting Ltd - London

Big mistake!  One of the key advantages of EMV chip is that it facilitates PIN verification which is, of course, much more secure than signature verification.  It also features offline PIN verification, enabling offline and unattended terminals.  It's really quite straightforward to switch from signature to PIN as the UK's Chip & PIN project demonstrated back in 2004.  And both merchants and consumers prefer it.  I doubt if anyone in the UK would want to go back to signature.

Added: 18 January, 2012 - 01:54 | Navin Jain - MasterCard - Mumbai
It's high time for USA to immense cardholder security measures like EMV (for POS) and 3 D Secure (for eCommerce tons).
Added: 18 January, 2012 - 08:40 | Steve Brunswick - Thales - Long Crendon

This latest news from Visa is a reiteration of their positioning to try to persuade the US market that an on-line PIN only implementation is the way forward. I first wrote about this a year ago here: http://www.finextra.com/community/FullBlog.aspx?blogid=5395

Added: 18 January, 2012 - 10:23 | Nick Collin - Collin Consulting Ltd - London

Presumably the big US issuers prefer chip and signature because it gives them a higher interchange rate, and Visa is bowing to pressure from them.  Sad if true.

Added: 19 January, 2012 - 09:45 | Steve Brunswick - Thales - Long Crendon

The argument I have heard put forward is more about the issues of synchronising off-line and on-line PINs and PIN changes, and the lack of need for off-line PIN in an environment where all transactions are authorised on-line.  Unfortunately the Finextra headline and parts of the Visa blog (which says "...there’s a lot of confusion around the myth that EMV means “chip-and-PIN...") could be misleading. Visa are not saying they don't want PIN debit, just that they don't want off-line PIN. In fact the final paragraph of the blog says "Visa will continue to support a range of cardholder verification methods (CVMs) with EMV chip, including signature, online PIN and no-signature for low-value, low-risk transactions."

Added: 19 January, 2012 - 17:55 | Mike Green - Green Consulting - Toronto

Visa’s arguments simply don’t ring true. Visa has been more than happy  to tout the virtues of Off-Line  PIN in counties with, online, real time processing,  think the UK and Canada, so why the different strategy in the USA. Is Visa betting the farm on mobile\contactless transactions or simply dumbing down EMV to get Issuers onside

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