Visa and MasterCard have filed an application with the Australian competition regulator asking it to require that 90% of in-store credit card sales be authorized via PIN.
In support of this mandate, the networks have offered to bear some of the cost of an education campaign directed at merchants and consumers.
The networks cited the effectiveness of PIN verification to combat fraud in regions such as the United Kingdom. Visa and MasterCard with this action appear to be trying to systemically narrow the use of signature verification methods as inherently less secure and irrelevant for contactless, online, and mobile transactions, which will eventually exceed traditional swipe transactions.
American Express and Discover support the filing, but have declined to participate in any organizing way due to concerns about appearing to be in conflict with Australia’s laws on competition, according to an article from the Sydney Morning Herald:
Australia’s biggest banks, including the Reserve Bank, support the move as a way to combat fraud. But the Reserve warns that the campaign must include all credit card providers or may be interpreted as a promotion for Visa and MasterCard being more secure than other cards.
The PIN versus signature argument has been a simmering issue in the United States and has gained even more attention post-Durbin Amendment. The U.S. Federal Reserve so far has declined to rule on a prescriptive approach to fraud control in the United States for debit cards, even though they have to the right to do so under Durbin. Even though this year’s debit card industry cost analysis (cite our wrapper here) clearly illustrated the efficacy of PIN verification to control fraud, any requirement to move the industry to a PIN-verified transactions standard didn’t happen. Yet, EMV implementation scenarios include chip-and-PIN as well as chip-and-signature, giving pause to credit and debit card issuers to consider making this kind of change and prepare their portfolios for the eventual shift from card to digital accounts.
