TMCnet Feature
August 09, 2011

Visa Unveils Plan to Accelerate EMV Chip Migration and Adoption of NFC Based Mobile Payments

By Ashok Bindra, TMCnet Contributor

Visa Inc. has unveiled plans to accelerate the migration to EMV contact and contactless chip technology in the United States. By building the necessary infrastructure to accept and process chip transactions that support either a signature or PIN at the point of sale, the adoption of dual-interface chip technology will help prepare the U.S. payment infrastructure for the arrival of near field communications (NFC)-based mobile payments.

In a statement, Jim McCarthy, global head of product at Visa said, “By encouraging investments in EMV contact and contactless chip technology, we will speed up the adoption of mobile payments as well as improve international interoperability and security.” He added, “As NFC mobile payments and other chip-based emerging technologies are poised to take off in the coming years, we are taking steps today to create a commercial framework that will support growth opportunities and create value for all participants in the payment chain.”

According to Visa, the chip technology will not only accelerate mobile innovations, but it will also secure payments into the future through the use of dynamic authentication. Chip technology greatly reduces a criminal's ability to use stolen payment card data by introducing dynamic values for each transaction, said Visa.

Even if payment card data is compromised, a counterfeit card would be unusable at the point of sale without the presence of the card's unique elements. By reducing static authentication, we diminish the value of stolen cardholder data, benefiting all stakeholders, Visa said.

Likewise, Ellen Richey, chief enterprise risk officer at Visa Inc. commented, “Dynamic authentication is the key to securing payments into the future. Adding dynamic elements to transactions makes account data less attractive to steal and takes more merchant systems out of harm's way, shrinking the battlefield against criminals. The migration to chip technology will be an important security layer and a critical step in a comprehensive strategy to use dynamic authentication across all markets and all channels.”

Visa's plan to encourage the U.S. adoption of dynamic chip authentication technology includes the following three initiatives:

  • Expand the Technology Innovation Program to Merchants in the U.S. – Effective October 1, 2012, Visa will expand its Technology Innovation Program (TIP) to the U.S.
  • Build Processing Infrastructure for Chip Acceptance – Visa will require U.S. acquirer processors and sub-processor service providers to be able to support merchant acceptance of chip transactions no later than April 1, 2013.
  • Establish a Counterfeit Fraud Liability Shift – Visa intends to institute a U.S. liability shift for domestic and cross-border counterfeit card-present point-of-sale (POS) transactions, effective October 1, 2015.

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Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell
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