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Another credit card heavyweight may soon get behind EMV

April 27, 2016

In recent months, merchants large and small have likely taken note of the trend in the credit card industry toward increasing security, especially when it comes to implementing safer EMV technology for as many transactions as possible.

In recent months, merchants large and small have likely taken note of the trend in the credit card industry toward increasing security, especially when it comes to implementing safer EMV technology for as many transactions as possible. Most notably, both Visa and MasterCard – the two largest payment processors in the world – began requiring large, tier-one merchants to adopt EMV in October of last year. Now, a top executive at another major lender is starting to advocate similar moves.

David Nelms, the financial services chairman and CEO for Discover, said that it’s important to continue pushing EMV to ensure a safer purchasing environment for consumers, businesses, and payment processors alike, according to a report from Retail Dive. Speaking at the most recent annual Electronic Transaction Association convention in Las Vegas, Nelms noted in particular that it’s probably a good idea for payment processors to ensure these transactions are even more secure by requiring consumers to enter a PIN for each of these transactions.

Chip-and-PIN card readers could make a significant number of transactions far more secure.Chip-and-PIN card readers could make a significant number of transactions far more secure.

Why is this important?
As with traditional credit or debit card purchases, it’s theoretically easy enough for a criminal to forge a person’s signature in a fraudulent transaction, but it’s far more difficult for them to guess a person’s PIN code. Right now, Discover and several other payment processing companies allow for signatures to happen, but Nelms noted that making the switch to PIN-only would likely reduce instances of fraud, the report said. Moreover, debit cards typically only allow consumers to complete a transaction using a PIN anyway, so it might make sense for the industry as a whole to just make that requirement uniform.

Nelms further noted this is something of a missed opportunity to increase security in the U.S., the report said. Most of the world is already on the chip-and-PIN model and has been for some time, but the continued use of chip-and-signature is really an America-only feature.

Getting over a hurdle
However, some industry experts also note that this might not be feasible to ask of some card-issuing financial institutions, the report said. In the past, similar efforts have been met with resistance from banks for a number of reasons, and all this does in a lot of cases is leave credit card processors or even merchants in a position where they’re saddled with the fallout from fraud.

“We’ve shouted in the dark for a long time,” Mark Horwedel, CEO of the trade organization Merchant Advisory Group, told the site. “This is basically a facade – this claim that the reluctance is consideration for the consumer. We’ve all used PIN numbers at ATMs for a long time. Let’s go to something that’s better.”

The more merchants can do to adopt EMV card readers, and push consumers to more secure PIN-based transactions, the better off they and their customers will be in the long run. This could serve to significantly cut down on instances of fraud experienced both by those companies and nationwide, because this could foster more secure buying habits in general.

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