Evan Schuman's StorefrontBacktalk

With Visa’s clarification on January 13 that its U.S. EMV deployments will include Chip-and-no-PIN, retailers are trying to decide if this is a good thing or a bad thing. On the good side, the move should certainly make it easier for consumers to use EMV cards and have it feel almost exactly like using magstripe cards. On the bad side, this forces retailers to immediately trust the chip technology perhaps a bit more than they want to.

William Titus, the Loss Prevention VP at Sears, wasn’t overjoyed at the prospect of deploying Chip-sans-PIN, whether it’s on the card directly or embedded into a consumer’s mobile device.

“When I think about secondary validation, that gives me more of a warm fuzzy even though we have people saying that I have a more sophisticated chip and that my smart device has got some protection sitting in it,” Titus said. “I’m really very comfortable and, quite honestly, Europe and everybody else is using Chip-and-PIN. It’s just another step in providing more secure data.”

Actually, although Chip-and-PIN is popular in Europe, PIN-less in Europe certainly exists. PIN-mandating countries in Europe include Belgium, Estonia, France, Finland, France, Ireland, Netherlands, Norway, Poland, Slovakia, Sweden and the UK. Euro countries that are not mandating PIN include Spain, Portugal, Italy, Turkey, Germany and Russia.

In Asia, Japan mandates PIN, China does not mandate PIN and Malaysia doesn’t mandate PIN but it’s slated to start mandating it after 2015. Much of the rest of Asia is mostly signature. New Zealand, India and Australia are all in the PIN optional camps.

In North America, the U.S. is surrounded with a split decision. Northern POS in Canada mandate PIN and Southern POS in Mexico are PIN optional.

In the Visa statement, Visa’s head of authentication product integration, Stephanie Ericksen, said the technology that the U.S. will be deploying makes the PINs unnecessary.

“That’s because, in the U.S., 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,” she said, adding: “As a late adopter of EMV, there’s a great upside for the industry in the U.S., because we can avoid much of the cost and complexity involved in deploying older generation chip cards, while still reaping all of the benefits of reduced counterfeit fraud.”

As a practical matter, though, getting consumers to embrace EMV—unlike, say, how U.S. consumers never even remotely warmed to contactless payment—is all about minimizing any required behavioral changes. And if the transaction can be accelerated at the same time, all the better.

Visa stresses that this can all happen gradually.

“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,” Ericksen said. “In the longer term, we expect the industry will reduce or even eliminate its use of static verification methods, such as signature and PIN in favor of new and dynamic forms of cardholder verification.”