Campaign Wages Issuer Pressure Toward Chip And PIN

A consumer-issues strategy group is pushing card-issuing U.S. banks to support PINs when they issue new EMV chip cards this year, and not just the chip-and-signature approach that Visa and MasterCard are allowing them to use, Finextra reported on Monday (March 9).

Washington, D.C.-based Consumer Policy Solutions has launched a consumer education campaign called “Protect My Data” to put pressure on banks to adopt chip and PIN, arguing that using a four-digit PIN for authentication is used across the rest of the world and is more secure than signature-based authentication.

“With access to the most advanced technology available, there is no reason for this pattern of half-hearted efforts to continue,” said Consumer Policy Solutions president Debra Berlyn. “A crucial element in improving our current system is a migration from our outdated chip and signature payment cards to chip and PIN equipped payment cards.”

For the moment, the campaign is focused on consumer education, working to convince consumers to demand PINs from their card issuers, although Berlyn made it a point to name-drop Senators Mark Warner and Amy Klobuchar as chip-and-PIN supporters, as well as President Obama, who last fall ordered 9 million federal payment cards to be shifted to chip and PIN, in a company news release. She also said her group was “urging the gamut of decision makers — state and federal legislators and regulators, the financial sector, consumer-advocacy groups and American consumers everywhere — to work together” to spread chip and PIN in the U.S.

That may be an uphill battle. While U.S. merchants will have to keep keypads on their counters for the foreseeable future to support existing debit cards, the option of not requiring PINs was a bargaining chip in the process of getting reluctant banks to finally adopt EMV cards.

Visa’s argument at the time was that the U.S., with its real-time online card processing for most merchants, could get by without PINs. “We can rely on online processing where transactions are transmitted in real-time to the issuer for approval. With that in place, there’s no need for the offline authentication that was the genesis of chip-and-PIN,” Visa head of authentication product integration Stephanie Ericksen said in 2012, according to Finextra.

But not all card issuers think the cost to banks of PIN management is worth the risk. “We should be doing the most we can to fight fraud,” Merrill Halpern, assistant vice president of card services at United Nations Federal Credit Union, told The Wall Street Journal in January. “And the only way to send that message is to stand clearly behind chip and PIN.”