Visa insists that chip and signature will be plenty secure and downplays the need for chip and PIN cards. The American card providers are launching EMV, with chip and signature, at least to start and perhaps chip and PIN later. But now that the US offers one of the least secure card markets, fraud is migrating to the American market. Fraud monitoring and fraud mitigation technology that doesn’t exist in other places around the world help keep a lid on fraud. “EMV’s primary purpose around the world has been fraud prevention, and the US has done a pretty good job of managing fraud through its real-time online network of payment processing,” Vanderhoof explained. In Europe, where more transactions were done off-line, chip and PIN were critical to transaction security. has managed with the mag stripe because with its cheap telecommunications networks merchants conducted credit card transactions online, complemented by some pretty sophisticated fraud detection software. The company runs an EMV site with more details.Ī traditional magnetic stripe card costs about $.25 while a chip card can cost $1.25 to $2.50, according to ROAM. The chip has an operating system and several apps, depending on the level of security it provides and whether it works with signatures or with PINs. Jack Jania, SVP of strategic alliances at Gemalto, a digital security company which makes chip-enabled payment cards and the infrastructure to support them, said the chip embedded in the cards has the same computing power as an X286 computer.
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“There will still be contentious discussions on how to make the transition to EMV work in the U.S., and how the technology standard will be implemented at the point of sale.” to EMV,” wrote James Wester, Research Director for IDC Financial Insights, responsible for the global payments practice.
“It is interesting that the Target breach happened as discussions about payment security are becoming more intense, driven by the migration in the U.S. (EMV stands for Europay, MasterCard and Visa, which developed the technology specification for payments which has been adopted by the major card providers.) News stories have drawn attention to the fact that American credit cards lag behind Europe and Canada when it comes to security. More secure cards wouldn’t have averted the breach but they would have limited the value of the stored data. The 70 million Target credit card breach might be the first time most people ever heard of EMV, if they even noted its mention in the coverage.