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MasterCard Pushing EMV PIN. Visa? Not So Much
Why not make it 100 percent as soon as the retailer hits the percentage of transactions? McGrath said the delays are necessary, because MasterCard wants EMV to be sufficiently widespread before fully kicking in the reductions. “There needs to be a certain level of penetration for this to be most effective,” he said. “We need the market to mature to a particular point.”
The liability hierarchy seesaw also does not kick in until October 2015, according to MasterCard. Note: That liability hierarchy in October 2015 excludes fuel retailers, which don’t get to participate in that program for another two years (October 2017).
The back-and-forth between the two top card brands on EMV specifics glosses over the fact that a fundamental investment argument has to be made to retailers that any of this is worth doing. Trinette Huber, the manager of Information Privacy and Security at Sinclair Oil, a $7 billion oil and gasoline company with 2,700 gas stations and convenience stores, made the argument on these virtual pages in November 2011 that both brands still have a lot of convincing to do.
After MasterCard described its roadmap and its incentives, Huber said she still is not convinced. “I don’t understand how threats of having to pay for fraudulent cards is such a great motivator. So, pretty words but no substance on why retailers should consider this an opportunity,” she said.
Verifone, which has a huge stake in the terminal side of this debate, opted to not be a cheerleader for the specifics of the MasterCard move, while taking a subtle dig at Visa. “We’re awaiting further details from MasterCard but, at this stage, they seem firmly supportive of Chip-and-PIN EMV, whereas Visa appears somewhat indifferent,” E-mailed Erik Vlugt, Verifone’s VP of product marketing.
Not so sure I’d say Visa was being indifferent. More that it is super-nervous about making sure American consumers don’t reject EMV the way they, for the most part, did not fall in love with contactless.
Randy Vanderhoof, the executive director of the Smart Card Alliance, said he sees both card brands in a very delicate position.
“The issuer has a really tough decision to make if they’re a Visa issuer. Am I going to continue to absorb all of this fraud by relying on signature?” Vanderhoof said. “Should I implement PIN, knowing that introducing PIN is going to make EMV implementation more difficult? There’s no question about that.”
Then again, if the intent is to eventually support PIN, isn’t doing it all at once the best way? As long as the consumer is going through disruption, isn’t that the least painful time to introduce PIN? “Now would be a good time to do it,” he said. Still, the argument about disruption also has merit: “Anything you layer on top of (the change) is disaster plus. Until we get EMV out in the field, we can’t tackle these other issues. It’s messy any way you cut it.”
The challenge won’t even be limited to training consumers to move from swipe (magstripe) to insertion (EMV). (Fortunately, few consumers ever got used to wave—contactless—so at least that behavior won’t have to be unlearned.) Vanderhoof gives the example of a consumer walking into a favorite retailer with his new EMV card for the first time. The associate patiently explains how the new card needs to be inserted. But when that consumer walks into the retailer down the street, the same card still may have to be swiped.
But that is not so different from today, where different types of terminals force consumers to swipe on top or on the left or to have the card facing a different direction. In other words, consumers are already used to having the card processing drive them crazy.
-Marc
February 2nd, 2012 at 10:03 am
When our company switched from AmEx to MC for business travel expenses, I thought we finally had the opportunity for chip/PIN & signature cards to facilitate the travel in Europe. “They’re not available in the US yet”, I was told by the bank representative who conducted the training on the new related expense reporting website. It was interesting to see that the chip card with mag stripe was available to my colleages in Canada.
I thought the idea with chip & signature was to allow its use in both US & EU markets. One card – dual authorization methods.
February 3rd, 2012 at 4:49 pm
I want Chip & PIN. With Chip & Signature, sure it has a an EMV chip, but then a fraudster could just steal my card, run it through the chip reader and then sign my name. The PIN adds an extra layer of security as only I (should) know it. At the very least, I would like to see a dual method wherein if the US insists on using Chip & Signature, our cards would work as Chip & PIN in countries where that is the norm. I am just sick of this back and forth. America needs to get off its high horse and comply with the world payment standards. Visa says Chip & Signature, MasterCard wants Chip & PIN and then Amex is mysteriously quiet. All of this talk….the government, banks, acquiring banks and card networks need to work together to make it affordable and easy to fast track EMV.