Consumer Organizations Push PINs for EMV (May 4, 2015 )
In an April 30 letter sent to Congress and other federal agencies, an ad hoc group of four consumer and technology organizations called for broad action to require PINs—not signatures—for all U.S. EMV card transactions. ProtectMyData, the Multicultural Media, Telecom and Internet Council, the Hispanic Technology and Telecommunication Partnership and DiverseTech also sent the letter to the White House, the Federal Reserve and the CFPB. The groups argue that requiring cardholders to enter a PIN for credit and debit card transactions—the standard approach in many markets outside the U.S.—is more secure than the signature-only authorization approach many U.S. issuers pursued with the first wave of EMV credit cards for this year’s chip-card migration.
“The PIN requirement adds a distinct layer of security and complexity to each transaction that dramatically reduces fraud,” the group wrote. The letter also points to President Obama’s executive order last year requiring chip-and-PIN technology for all government-issued credit and debit cards as an example of the superiority of PINs in providing appropriate safeguards against fraud.
U.S. issuers already have shipped tens of millions of EMV credit and debit cards to consumers in advance of the October 2015 EMV liability shift. Forecasters predict issuers will have shipped nearly 600 million EMV cards—about half of all U.S. payment cards—by the end of this year. U.S. EMV migration will be complete in 2016 or 2017, experts believe.
Most U.S. issuers so far have opted to mirror the existing authorization processes for credit and debit cards, according to Randy Vanderhoof, executive director of the Smart Card Alliance. EMV debit cards have PINs, just like the magnetic stripe cards they’re replacing, and most major issuers initially are requiring only a signature for EMV credit cards, with the goal of reducing confusion at the POS and speeding the overall transition to EMV, Vanderhoof explains.
U.S. issuers’ reliance on signature to authorize EMV credit card transactions might make sense for some issuers at first, but compared with global practices, it’s unusual and it may not persevere, according to David Worthington, Bell ID’s principal consultant on payment card and chip technology. “While there will be legacy support for signature for EMV credit cards for some time in the U.S., I’m sure that opportunities and pressure for chip-and-PIN will quickly grow as the U.S. EMV infrastructure matures and as cardholder preference becomes known,” he tells Paybefore. “In most other countries, consumers have quickly shown a strong preference for PIN over signature once the acceptance infrastructure for it was in place.”
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