Wal-Mart executive calls for US move to Chip and PIN

US retailer Wal-Mart is calling on the nation's banks to move to the international EMV standard for securing financial transactions at the point-of-sale.

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Wal-Mart executive calls for US move to Chip and PIN

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Speaking at the annual forum of the Smart Card Alliance, Jamie Henry, director of payment services, Wal-Mart Stores says the supermarket chain rejects the idea of investing in 'band-aids' such as end-to-end encryption and tokenisation.

"Our position is let's just cut through this winding road and the rollout of all this expensive technology we're being asked to deploy, and let's get directly to the end result, which in our view as it currently stands is chip and PIN."

He says Wal-Mart already has 100% of its payment system hardware equipped to accept EMV chip and PIN, and is finalising the software programs for these devices.

"The PIN piece is very important to us. We don't see it being rolled out otherwise," he says.

Speaking at the same conference, Dodd Roberts, president and CEO of the Merchant Advisory Group, called on payment industry stakeholders to come together to set a direction toward EMV in the US that does not require multiple stages of investment in interim solutions.

US merchants are particularly concerned that international fraudsters will turn their attention to US shores as the EMV standard is rolled out in other markets.

Worldwide nearly one billion EMV cards have been issued, according to keynote speaker Brian Byrne, a Visa executive and the chair of the EMVCo board of managers.

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Comments: (3)

Nick Collin

Nick Collin Director at Collin Consulting Ltd

So the US market is finally beginning to see sense.  With Wal-Mart behind it, this must surely mean a massive migration to EMV chip.  Totally agree with the insistence on full Chip and PIN - chip and signature has always seemed to me to be missing the point.  There is also a huge opportunity for the US banking and payments industry to learn from experience in the rest of the world and embed added value functionality into their EMV infrastructure from the outset - remote chip authentication, EMV contactless, multi-payment cards etc - all starting to take off in a big way over here but as add-ons rather than fully integrated from the start.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

When Wal-Mart tried to drive RFID technology in the retail industry a few years ago, it resulted in a lot of buzz but nowhere near 100% adoption even several years after its original deadline has passed. It remains to be seen how much impact its current call for EMV is going to make in the USA. But, one thing is for sure: a moniker like "bandaid" solutions from someone like Wal-Mart threatens the prospects of nuBridges and other providers of E2EE and Tokenization solutions.

A Finextra member 

There are two aspects of the article that are really pertinent here - the need for US payment industry stakeholders to unite on the issue and also the rising threat of fraud in the region. Nick Collin highlights a good point that EMV can lead to value-add, as well as stronger security. However, migration is ultimately going to be driven by the negative factors associated with magstripe cards, not the positive reasons that prove EMV is advantageous. It is the risk of fraud that is pushing EMV up the banks' agenda. For example, Aite Group reports that US card fraud at the ATM is on the rise. In fact, 10 per cent of all fraud victims in the U.S. have experienced fraudulent ATM cash withdrawals and this resulted in 23% of those leaving their primary financial institution.

With most of the world migrating to Chip and PIN including the US' neighbours Mexico and Canada, US banks are also becoming increasingly aware that they are the odd ones out in terms of debit card security. While EMV in the US is still some way off despite Wal Mart's support of the standard, the risk of damaging brand reputation in connection with the clear need to reduce fraud could push the US - albeit slowly - towards the tipping point for migration to EMV.

 

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