Card Networks Push EMV in Wake of Breaches
March 10, 2014
On Friday, MasterCard and Visa unveiled plans to lead the formation of a multi-industry group focused on improving security in the U.S. payments network. Initially, that effort will focus on speeding up implementation of EMV technology, but the group also will examine how to pave the way for tokenization, point-to-point encryption and more.
“The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security,” said Ryan McInerney, president of Visa Inc. “As we have long said, no one industry or technology can solve the issue of payment system fraud on its own.”
The card networks’ initiative is not the first post-Target attempt to get the disparate stakeholders in the payments value chain working together to improve security. Major trade groups from the retail and financial services industries announced a similar venture several weeks ago . Visa and MasterCard, however, may have more clout to bring these two long-warring factions to the table to solve an issue that affects all of them.
“One of the critical roles we play is to protect consumers and businesses against criminals and fraudsters,” said Chris McWilton, president of North American Markets, MasterCard. “Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust. EMV will be the next step in these efforts, alongside enhanced security solutions for online and mobile channels.”
While EMV will have a real and considerable effect on counterfeit fraud, as it has in other countries where chip & PIN technology has been implemented, card-not-present merchants and the companies helping protect them are understandably wary. CNP fraud has surged in every market where EMV has been introduced.
“[EMV] clearly has a very strong value proposition in terms of helping to solve the problem of card-present fraud at the ATM and point of sale,” said Pat Carroll, executive chairman of biometric technology provider ValidSoft. “But, blanket statements about EMV’s ability to reduce total payment card fraud in any adopted market are misleading.”