Visa announces three initiatives to push EMV adoption in U.S.
Visa Inc. today announced its plans to push the migration to EMV contact and contactless chip technology in the United States. The credit card giant said in a press release that the adoption of dual-interface chip technology will help prepare the U.S. payment infrastructure for the arrival of NFC-based mobile payments.
"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," said Jim McCarthy, global head of product, Visa Inc.
Chip technology reduces a criminal's ability to use stolen payment card data by introducing dynamic authentication values for each transaction. 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.
Visa's plan to encourage the U.S. adoption of dynamic chip authentication technology includes the following three initiatives:
• Effective October 1, 2012, Visa will expand its Technology Innovation Program. TIP will eliminate the requirement for eligible merchants to annually validate their compliance with the PCI Data Security Standard for any year in which at least 75 percent of the merchant's Visa transactions originate from chip-enabled terminals.
To qualify, terminals will have to support both contact and contactless chip acceptance, including mobile contactless payments based on NFC technology. Contact chip-only or contactless-only terminals will not qualify for the U.S. program.
• 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. Chip acceptance will require service providers to be able to carry and process additional data that is included in chip transactions, including the cryptographic message that makes each transaction unique
• Visa intends to institute a U.S. liability shift for domestic and cross-border counterfeit card-present POS transactions, effective October 1, 2015. Fuel-selling merchants will have an additional two years, until October 1, 2017, before a liability shift takes effect for transactions generated from automated fuel dispensers.
Currently, POS counterfeit fraud is largely absorbed by card issuers. With the liability shift, if a contact chip card is presented to a merchant that has not adopted, at minimum, contact chip terminals, liability for counterfeit fraud may shift to the merchant's acquirer.
According to the company press release, the liability shift encourages chip adoption since any chip-on-chip transaction (chip card read by a chip terminal) provides the dynamic authentication data that helps to better protect all parties.