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Most U.S. Credit Cards will have Microchips by End of 2015
Thursday, June 12, 2014 6:40 AM

The long expected migration of the U.S. payment system to the Europay MasterCard Visa (EMV) smartcard standard finally appears to be gathering steam, reports ComputerWorld.com. The Aite Group recently issued a report projecting that 70 percent of all U.S. credit cards and about 41 percent of debit cards (1.1 billion cards in total) will be EMV-enabled by the end of 2015.

Interviews with 18 of the top 40 credit-and-debit card issuers, including seven of the top 10, show that financial institutions are reportedly moving full speed ahead with EMV implementation plans. But unlike in many other countries where EMV cardholders are required to enter a Personal Identification Number (PIN) for in-person transactions, just a signature will be required in the U.S.

In fact, 13 of the 18 credit card issuers reviewed by Aite plan to issue EMV cards that require only a signature. Just one currently plans to issue EMV cards with a PIN requirement, while four have reportedly not decided what route to take.

EMV credit and debit cards use a microchip instead of a magnetic stripe to hold the data needed to process transactions. Experts consider such cards to be substantially safer than magnetic stripe cards, especially when a PIN is used. Though other countries moved to the technology years ago, U.S. retailers and credit card issuers only began recently amid heightening credit and debit card fraud rates.

Visa and MasterCard currently require U.S. retailers to implement technology for supporting EMV transactions no later than October 2015. However, they do not require card issuers or merchants to require PINs.

After the October 2015 deadline, merchants that do not have EMV infrastructure in place will face greater liability exposure in the event of a data breach.

 

(Source: ComputerWorld.com)