After years of steadily opposing embedding so-called smart chips in U.S. issued cards, the largest card brand has reversed itself and says it will now back the technology in the U.S.
The use of chip-embedded cards has become the norm overseas and cut down significantly on card fraud at point of sale terminals.
"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 products at Visa Inc.
"As NFC mobile payments and other chip-based emerging technologies are poised to take off in the coming years, we are taking steps today to create a commercial framework that will support growth opportunities and create value for all participants in the payment chain," McCarthy said Tuesday.
Not only will chip technology accelerate mobile innovations, it is also expected to secure payments into the future through the use of dynamic authentication. Chip technology greatly reduces a criminal's ability to use stolen payment card data by introducing dynamic values for each transaction, the card brand said in its announcement.
"Dynamic authentication is the key to securing payments into the future," said Ellen Richey, chief enterprise risk officer at Visa Inc. "Adding dynamic elements to transactions makes account data less attractive to steal and takes more merchant systems out of harm's way, shrinking the battlefield against criminals. The migration to chip technology will be an important security layer and a critical step in a comprehensive strategy to use dynamic authentication across all markets and all channels."
