Chip-enabled EMV cards are now being used in stores in the U.S., although several stores and consumers weren’t ready at the time of Thursday’s deadline. Retailers have decried the lack of personal identification numbers (PIN) in authenticating the cards at point-of-sales systems in the U.S.
That isn’t fazing executives at Visa, who insist the PINs—or even signatures—aren’t necessary for the cards to be sufficiently secure.
They also say that biometrics are the future of authentication and note that the technology is already being testing in markets like Brazil, India, and South Africa.
Visa executives seem to be contradicting themselves by saying that authentication isn’t necessary in the U.S., but that biometrics will go far in ensuring extra security at POS systems here.
"More than 60% of U.S. payment card transactions do not use any signature or PIN, and we expect that trend to continue,” said Stephanie Ericksen, VP of risk products for Visa.
Yet the company believes that biometrics, using a fingerprint or other body-based scan, will bring added security to all payments, including those online, according to Mark Nelsen, Visa SVP of risk products and business intelligence.
"Biometrics have a really good way of creating better security for e-commerce and remote payments in particular, which is the most difficult channel to secure just because of the nature of the environment,” Nelsen said. “Using a fingerprint on a handset to verify an e-commerce transaction is a really strong way to introduce better technology for a more convenient and secure payment.”
Retail groups have slammed the lack of PINs, saying that consumers wouldn’t find them inconvenient and that the added step would bring more security at a time when cyber-fraud is rampant.
“There could be a biometric solution,” said Mark Horwedel, CEO of Merchant Advisory Group, whose members are large retailers, on a conference call with reporters. “That could be better than PIN, but there’s no timeline for that. It’s still in the development phase. It’ll be quite some time til we find a means besides PIN that will gain approval and acceptance.”
Visa officials also cited changes in PIN requirements abroad, where PINs are a required part of EMV card transactions, in downplaying the importance of PINs. In Australia and Canada, for example, transactions of up to $100 do not require a PIN, and the U.K. recently increased the no-PIN limit up to 30 pounds, or about $40.
But Merchant Advisory Group VP Liz Garner told reporters this week that that’s no reason not to use PINs for higher-dollar transactions.
“Do I want to necessarily authenticate a $2 cup of coffee?” she said. “Maybe not. But if someone comes in and buys $100 worth of products, I would.”