EMV, the smart payment card standard used inmost of the rest of the world, is finally getting an endorsementand a strong nudge for its deployment into the U.S. market. Visa’s long awaited announcement today of its “Plans to AccelerateChip Migration and Adoption of Mobile Payments” starts layingthe ground work for two complementary moves. The first is thereplacement of magstripe cards with far more secure chip cards. Thesecond is the active encouragement of merchants to purchaseterminals with both contact and contactless EMV interfaces. Thatmeans merchants can accept both cards and, more importantly,transactions originated by NFC-equipped smartphones.
The U.S. has long held onto the magstripe card, a tactic that’sworked so well because of our online authentication andauthorization systems in the core of the payments network. But evenall of that computer power can’t counter a range of fraud types(especially counterfeit cards and card not present fraud for onlinecommerce) when it’s so easy to copy the payment data off of amagstripe card. EMV essentially makes counterfeit cards a thing ofthe past. The potential exists, of course, for counterfeit EMVcards to exist but right now it’s economically impractical – andthat’s enough to keep criminals from bothering when there are somany easier ways to profit.
Visa’s announcement addresses a major security weakness in today’spayments perimeter and moves the peanut way down the field forcontactless smartphone payments. At last.
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