The Inside Track on Chip & Pin Payment Cards

Looking into the near future, chip and PIN payment cards should soon become common place in the United States. Chip defines an embedded computer chip and PIN is a customer created personal identification number. In this country, there's been a great deal of resistance given the projected conversion cost of up to $8 billion to make this type of card standard issue in the US.

The United States Lags Behind the Rest of the World

With the exception of the United States, most countries are now using the Europay/Mastercard/Visa (EMV) chip cards, also known as smartcards. It's interesting to note that the EMV chip-based card technology has been available since the 90’s, and yet nothing has been done in the United States until recently.

The EMV chip-based card technology development, a joint effort of Europay, Visa, and MasterCard, will go a long way to enhance information security. In addition, it will also help create a roadblock for criminals who continue to exploit the weakness in the antiquated magnetic-stripe technology.

The Point of Difference

The basic difference between the U.S. cards and the cards used in Europe and areas overseas centers on chip and signature technology rather than the EMV cards with chip and PIN technology. The chip and PIN cards issued overseas require consumers to enter a PIN to finalize the transaction.

The potential sticking point for costly retailer equipment upgrades remains to be seen. Toward that end, there are incentives offered by AmEx, Visa, Discover and MasterCard for card-issuing banks and retailers with the stipulation that requires upgrades by October 2015, no exceptions. After that, there will be a position shift involving fraud liability which translates into a serious compliance and liability issue.

A few financial institutions are already on board ahead of the 2015 deadline. However, many beyond the finance sector, such as retailers, are still seeking to implement the software required process chip-and-PIN payment cards.

The Larger Picture

Seemingly nothing will affectively stop the arms race that is quickly escalating in the global cyberwar that is grabbing headlines at an almost daily rate. However, it is in the best interest of both corporations and individuals to be knowledgeable and prepared for them.

Implementing methods such as 2-factor authentication and initiating campaigns to increase further awareness of cybersecurity issues amongst the civilian and consumer populations would be a valuable more forward. Growing the knowledge-base beyond the IT security community would hopefully lessen the lower-level issues and allow them to focus on more critical and specialized concerns.

Everyone wants a safer digital community for business and their personal life. This means we have to increase our commitment to learning about how to prevent future attacks.

Jacqueline von Ogden

Since 1999, Jacqueline has written for corporate communications, MarCom agencies, higher education, and worked within the pharmacy, steel and retail industries. Since joining the tech industry, she has found her "home".