Vulnerability Management

MasterCard announces product future around EMV

As expected, MasterCard has joined Visa in its support for chip-enabled technology, considered one of the most effective ways to deter counterfeit debit and credit card fraud.

Citing the need to keep pace with advances in technology and new channels from which consumers wish to make payments, particularly mobile and online, MasterCard has laid out a "roadmap," which, it said, will provide added security and control in payment choices.

"We're moving toward a world beyond plastic, where consumers will shop and pay in a way that best fits their needs and lifestyles with a simple tap, click or touch in-store, online or on a mobile device,” Chris McWilton, president of U.S. markets at MasterCard, said last week in a news release.

The strategy for MasterCard's rollout involves establishing EMV -- the global standard on which the technology is based -- as the framework for the next generation of payments, getting vendors and retailers on board, building in greater security features to better protect consumer data, and spreading the technology across all channels of commerce, including mobile, ATMs and point-of-sale terminals.

EMV chip technology refers to a microchip embedded in a credit or debit card or a mobile device. Sometimes mistakenly referred to as chip-and-PIN, EMV -- an acronym for Europay, MasterCard and Visa -- is most often deployed with a number of cardholder verification methods, such as signature, as well as a PIN.

The United States lags the rest of the world in implementing EMV technology because it houses a more complex payment infrastructure, Erik Vlugt, vice president of marketing for North America at VeriFone, a global provider of electronic payment solutions, told on Tuesday.

"For many of the merchants, it's a significant effort to switch over," he said, citing cost.

Visa has tried to counter this resistance by eliminating the need for retailers to annually validate their compliance with the Payment Card Industry Data Security Standard (PCI DSS) if at least 75 percent of their Visa transactions originate from chip-enabled terminals. 

Vlugt said there's no doubt that the advanced EMV technology can significantly prevent fraud, particularly in two categories: counterfeit card fraud, where criminals create their own magnetic stripe cards using data pilfered from database thefts and other exploits, as well as the ability that comes with EMV to enter a personally identifiable number (PIN), which only a user knows, which can further cut down on identity theft.

Needless to say, EMV's climb has been a slow one in America. Visa announced Monday that U.S. financial institutions have now issued one million Visa-branded, EMV chip-enabled cards as of Dec. 31, 2011, but most of those are for businesspeople who frequently travel overseas, where EMV-ready point-of-sale terminals (PoS) are more common.

According to EMVCo, which maintains the EMV specifications, approximately 1.3 billion EMV cards have been issued globally and 20.7 million PoS terminals accept EMV cards as of the third quarter of 2011.

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