Just in time to travel to the London 2012 Olympic Games, my new Visa EMV chip corporate credit card arrived in the mail. This type of card was new to me, so I put it to the test in London, where this technology is more commonplace. One place I tested it out was Upper Playground, a cool store in London’s Soho neighborhood that features the work of local artists.
Making purchases was quick and simple. The main difference was that instead of swiping my card, I inserted it in the terminal. Then I simply signed for my purchase, just as I normally would in the U.S.
Other American travelers at the Olympics this year are likely to have been carrying their new chip cards with them, too. That’s because last year, Visa announced plans to accelerate the migration to chip technology in the U.S. Since that time, U.S. financial institutions have reported issuing an estimated 1.5 million chip cards as of June 30, 2012, and we are continuing to see positive momentum as the industry moves toward more broad-based adoption of this technology.
Why is chip coming to the U.S. now? EMV contact and contactless technology will help lay the foundation for NFC-based mobile payments, which we expect to take-off in the coming years. Chip also provides an added layer of security to transactions and enhanced acceptance for Americans traveling abroad.
Being at the center of innovation is nothing new for Visa. Bringing chip to the U.S. is another way that we are paving the way forward.
Earlier this week, Visa announced that U.S. financial institutions have reported issuing more than one million Visa chip cards. While this might be a drop in the bucket compared to more than 650 million Visa cards already in the U.S., it shows a great deal of momentum and interest in chip. Yesterday, Visa’s Head of Authentication Product Integration Stephanie Ericksen joined CNBC’s Fast Money show to explain the benefits of chip technology, including the fact that it is the same secure technology that powers NFC-based mobile payments.
We’ve received a lot of positive feedback since Visa announced a roadmap for the U.S. adoption of EMV chip cards and NFC-enabled mobile payment devices. There’s growing consensus in the industry that it makes a lot of sense to encourage investments in chip technology. That’s because it adds a layer of safety to transactions, through the use of dynamic authentication, as well as enhances international card acceptance. And it helps to build an acceptance infrastructure to support mobile payments.
Point-of-sale online PIN verification for debit transactions will continue to exist in the United States for some time. In fact, Visa expects that merchant and/or issuer preference for PIN verified transactions may become more prevalent in the U.S. debit category given recent regulation. Moreover, we recently made announcements to our U.S. clients regarding 2012 enhancements to our core Visa-branded debit product to improve the performance of PIN verified transactions.
While PIN does provide some fraud protection for lost and stolen cards and has proven to be an effective fraud deterrent in international markets where trasactions are sometimes approved “offline,” PIN will forever remain a static data element. And we continue to believe that long-term static data elements, including PIN, can create an increased risk for fraud. An increase in ATM fraud could occur in cases in which the PIN is stolen along with cardholder account information. Long term, we will focus on risk-based and dynamic ways to verify the cardholder, such as one-time passcodes that are sent by text or email for high risk transactions.
Additionally, the article stated that “In a departure from nearly every other global market that has switched to EMV cards, which are commonly called chip-and-PIN for their most prominent security feature, Visa’s plan excludes PINs.” As already noted Visa supports online PIN as a cardholder verification method; however, it’s important to note that there are more EMV markets that have implemented chip and signature than chip and PIN.
Bottom line: Visa will continue to support online PIN as a cardholder verification method for debit transactions in the U.S., and at the same time encourages the move toward future adoption of dynamic cardholder verification methods.
Bringing convenience and value-added services to Hong Kong taxi drivers and their passengers
Six weeks after the first fleet of high-tech taxis featuring AutoTAXI (Autotoll Intelligent Taxi Calling Service) hit the streets of Hong Kong, seven more taxi companies are now partnering with Autotoll to have the AutoTAXI system installed. AutoTAXI, a new service model for Hong Kong’s taxis, is a collaboration between Autotoll, Dah Sing Bank and Visa.
These high-tech taxis offer a range of services that benefit both drivers and passengers, including an intelligent dispatching service – that allow passengers to book a taxi via phone – and the first commercial payment card acceptance in Hong Kong taxis. We are targeting to have 500 taxis featuring AutoTAXI on the streets of Hong Kong in the next few months. Taxis using the service can be easily identified. For a promotional period, participating taxis will carry unique wings mounted on the rooftop lightbox, making them easily identifiable as “flying taxis”.
These taxis exclusively accept Visa card payment using either contactless Visa payWave or conventional chip and magnetic stripe cards.
Watch the video that is currently playing in more than 100 taxis.
I’ve often been asked if the United States will ever adopt EMV chip technology as many other countries have. My response has been, it’s not a question of “whether” the United States will begin to use chip technology but “when” and “how.”
At Visa, we have believed for some time that markets need to move toward dynamic authentication in order to carry payments into the future. As chip technology has been adopted around the world, debate has raged over whether the required investments are justified for the U.S. as well.
Merchants outside the U.S. interested in accepting chip-enabled payments at the checkout counter can get a boost from Visa. A new initiative launched by Visa encourages merchants to deploy payment terminals that can support dynamic data authentication.
Visa has long seen dynamic data technology, such as chip, as a key element in our long term security and authentication strategy. With dynamic authentication, stolen card information becomes useless to criminals, reduces counterfeit fraud and helps take merchants out of harms way.