Magazine article American Banker

EMV Cards: The Beginning of the End for Hackers

Magazine article American Banker

EMV Cards: The Beginning of the End for Hackers

Article excerpt

Byline: Jason Oxman

Protecting consumer data is the payments industry's highest priority. Numerous data breaches have made clear that Americans' personal information is vulnerable to criminals. Today, payments networks along with financial institutions and merchants are implementing protections that address consumers' concerns about data security.

An important first step in this security upgrade is the transition to more secure chip or EMV cards. Starting Oct. 1, chip cards will begin replacing the 1.2 billion magnetic-stripe cards in American wallets and eight million merchants will begin updating their checkout lanes to accept the new cards. EMV cards, which are widely deployed elsewhere in the world, offer a significant advancement in the security of retail transactions.

And yet, recent media attention has focused on disagreements over whether consumers should be required to use a PIN in EMV transactions. One retail trade group argued that rolling out chip cards without PIN requirements gives the U.S. "the weakest card security in the world."

This debate is a distraction from the important work being done by the entire industry to fight cybercrime. Although those arguing for a PIN requirement are correct that chip card rollouts outside of the U.S. required PINs, the chip technology infrastructure in the U.S. does not require a PIN to prevent counterfeit card use. The chip cards do that with or without a PIN.

Moreover, let's remember why chip and PIN went hand in hand outside of the U.S. Early EMV implementation came at a time when telecommunications infrastructure in Europe was spotty and merchants could not connect their payment terminals to the card networks. That meant the handheld terminal that a waiter in Paris brought to your table was not connected to the network. The card transaction was authorized "offline" using a PIN as well as the card because the terminal couldn't talk to the network in real time. …

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