Discover has jumped on the bandwagon to help bring chip credit cards stateside.
The credit card issuer last week said it's issuing a mandate for retailers and their banks to accept EMV chip cards by 2013. Discover joins Visa and MasterCard in encouraging EMV card immigration onto U.S. shores.
But let's back up a minute.
EMV-enabled debit and credit cards contain an embedded microprocessor chip that greatly increases the security of transaction and account data. The chip makes it nearly impossible to clone a counterfeit card. (EMV stands for Europay, MasterCard and Visa, which maintain the chip technology standard.)
Some of the cards require a personal identification number to complete a transaction, while others only need a signature.
EMV cards are widely used in Europe and are quickly being adopted in Asia, Latin America and the Middle East. The U.S. has woefully lagged in issuing and accepting these chip cards, which have been around for 15 years, and instead depended on cards with the traditional magnetic strips.
That's all changing.
"There are a multitude of things that are happening," says Farhan Ahmad, Discover's global head of emerging payments. "There's more global travel. There's the European mandate to be fully EMV-compliant. And, finally, the fact that Visa forced people to take action."
Visa issued its own EMV mandate last August, giving U.S. retailers until 2015 to accept the chip cards or shoulder card fraud liability. Earlier this year, MasterCard followed up and offered U.S. retailers and ATM owners a road map to become EMV-friendly by April 2013.
In the last year, several major banks have rolled out EMV chip credit cards for globetrotters and/or corporate travelers, including Chase, Bank of America and Citi.
Discover, however, is not among them. The issuer is working to change the payment side first, Ahmad says, before it hands out chip cards in the U.S. (Discover issued more than 1 million EMV cards internationally.)
"Discover will not be issuing cards to be used domestically in the near term," Ahmad says. "Discover has some key decisions to make whether to go with chip. Those considerations are underway right now."
Have you ever needed an EMV chip card? Do you think chip cards should be standard in the U.S.?
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