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US bank to offer chip and PIN

By Marcie Geffner ·
Monday, June 6, 2011
Posted: 10 am ET

Another U.S. bank has taken a step forward in the slow migration toward chip and PIN credit cards. But the step is a small-scale one, expected primarily to benefit U.S. travelers to foreign countries.

The financial institution in this latest development is Silicon Valley Bank. They will offer chip-based payment cards based on the EuroPay-MasterCard-Visa, or EMV, standard to its cardholders, many of whom are frequent travelers.

U.S. travelers often can't use their traditional magnetic stripe payment cards abroad, particularly at unattended kiosks, because the older technology is known to be more prone to fraud. An October 2009 Aite Group study found that U.S. consumers felt frustrated or embarrassed when their credit card was declined overseas. The new cards should help to alleviate such concerns and problems.

Silicon Valley Bank, a subsidiary of SVB Financial Group in Santa Clara, Calif., caters to technology, life science, venture capital and premium wine companies. The financial group has 27 U.S. offices and international operations in China, India, Israel and the United Kingdom, according to its website.

The bank selected Gemalto, a digital security company in Austin, Texas, to provide EMV-compliant cards to its entire cardholder base. Gemalto has 87 offices and 13 research and development centers in 45 countries.

The chip and PIN credit card technology has been widely adopted in Europe, but not in the U.S. The "chip" element refers to a microchip embedded into the credit card to help secure the account information. The "PIN" is a personal identification number the cardholder enters to authorize payment. Chip and PIN doesn't require a signature and is less vulnerable to fraud due to the PIN. Chip-based credit cards are already used in more than 130 countries.

U.S. travelers who have magnetic-stripe credit cards are advised to purchase tickets ahead of time or online, whenever possible, carry extra cash at all times, and inform payment-takers that their card needs to be swiped and a signature is required.

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