Banks Like the PIN-less Path for EMV in the USA

by Mercator Advisory Group 0

The American Banker article from last week says it all: “Signature, Not PIN, the Easiest Path for EMV in U.S., Banks Say.”

Global EMV implementation is not a monolithic affair. There is “Chip and PIN,” the format used in the UK, Canada, France, and most West European nations. “Chip and Sig” – the use of an EMV card without a PIN – is the typical deployment method in Asia and is how German banks have chosen to deploy the strong anti-counterfeiting technique.

Without making a strong recommendation either way, Visa has demonstrated how it can ease EMV deployment through its “early data” approach, a method that minimizes impact on issuer systems. Given the comparative complexity of PIN implementation, it’s no wonder that these FIs say they are leaning toward signature-based EMV for the USA.

One issuer of EMV cards for U.S. accountholders reported that any interchange difference was “not material” to his firm’s choice.

Many merchants prefer the “Chip and PIN” approach because of its improved security and chargeback advantages, especially around friendly fraud. Canada and Mexico are both deploying “Chip and PIN.” Interoperability with other nations will, therefore, have some complexities. The impact of a “Chip and Sig” implementation on open-loop transit fare systems may not be optimal.

But, given the power banks hold with the card brands, “Chip and Sig” could well be initial deployment option for EMV in the USA.

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