Visa’s Ellen Richey Says Widespread Use of Chip Cards Is Coming
Visa chief risk officer Ellen Richey acknowledges it will take several years for the U.S. to achieve widespread use of credit cards with embedded chips. She says Visa is advocating a “chip and choice” approach to the new cards, referring to a potential hurdle where merchants prefer a chip and PIN system such as that in Europe while banks support a chip and signature approach. To make online transactions more secure, Richey says Visa has developed a new tokenization standard that replaces card numbers in online transactions with a set of meaningless numbers that cannot be used elsewhere. She also notes that getting ATMs compatible with chip-based cards will be a costlier matter, so the deadline for ATM compliance is 2017. In the United States, about 7 million chip cards are already in the market, mostly issued to consumers who frequently travel abroad; consumers will likely see the new cards with their card renewal, especially by October 2015. Richey notes that merchants who lack chip readers will still be able to use the magnetic strip feature because the cards also will have stripes.
From “Visa’s Chief Risk Officer on the Future of Credit Card Fraud”
MarketWatch (03/21/14) Sullivan, Bob