Wal-Mart Calls for EMV Standard in U.S.

May 27, 2010

While the U.S. remains a holdout among developed nations migrating to the EMV standard for card-based payments, the move toward Chip-and-PIN cards may have gotten a boost recently from the world’s largest retailer. During a panel discussion at a recent conference, a Walmart representative said mag stripe cards are “fundamentally flawed” and that the U.S. should “go directly to Chip-and-PIN,” according to published reports. Jamie Henry, Wal-Mart’s director of payment services, told attendees at a recent Smart Card Alliance event in Scottsdale, Ariz. that “Wal-Mart’s POS hardware is 100 percent Chip-and-PIN capable. Our hardware is in place. We are working on implementing it in the U.S. It’s time for Chip-and-PIN in the U.S. Let’s get a roadmap and move it forward here in the United States.” Despite Wal-Mart’s public endorsement of the EMV standard, which retailers covet because they believe Chip-and-PIN transactions are less susceptible to fraud, the significant investment required with no corresponding return makes U.S. migration to the standard unlikely in the near term. Henry said issuing banks don’t want to give up the lucrative signature interchange model. “Issuers and networks are married to signature interchange, and as long as that continues…it will hinder U.S. adoption of chip-and-PIN technology,” he said.