Chip without PIN doesn't offer full protection for consumers, they say; Visa, Mastercard argue that PIN isn't needed
By Jaikumar Vijayan Computerworld - U.S. retailers are digging in their heels over their need for PIN authentication for Europay MasterCard Visa (EMV) smartcard use here.Visa and MasterCard want retailers to migrate to EMV smartcard-ready payment systems by October 2015, but at this point aren't requiring that a Personal Identification Number (PIN) system be used to authenticate cardholders.
EMV cards store cardholder data and other sensitive information in a tiny embedded microprocessor. Such cards are considered substantially safer than magnetic stripe cards currently used in the U.S.
But merchants maintain that the chip cards offers few new benefits without use of a PIN.
About 60 of the 80-plus countries now using EMV cards require that cardholders enter a PIN when using the card at a payment terminal.
In a statement Friday, the National Retail Federation (NRF), which represents thousands of retailers and other businesses, called on MasterCard and Visa to implement the same model in the U.S..
"We remain insistent that U.S. retailers' customers be given the same protections as consumers," in the other countries,
NRF general counsel Mallory Duncan said.
"There is no single solution to the complex issue of criminal hacking and we know PIN and Chip is just a bridge on the long road to a safer payment system, but it is an important step in the right direction."
Signatures are a virtually worthless form of authentication, Mallory noted in the statement. "Insisting on chip-and-signature cards is like installing an alarm on the front door of a home while leaving the back door wide open. It doesn't make sense when the technology exists to secure the entire house," he said.
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