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Chip-n-PIN: without the chip and without the PIN

"EMV in the US" still seems to be a debate point. However, the potential far-reaching problem with EMV ("chip" cards) is deeper than its US roadmap.

Big Fish, no chips
Few people noticed that Barclays quietly dispensed with the use of "chip" for mobile banking: instead of a PINsentry dongle that worked in conjunction with a Barclays chip card, they now allow for authentication that involves just a mobile phone (confusingly called Mobile PINSentry), without using any "chip". Surely, Barclays does rely on "mobile fingerprinting" and other clever security techniques, but authentication nevertheless is still "chipless".

Apple is going to introduce biometrics as part of authentication solution, creating the next-gen equivalent of "chip & PIN".

Online payments have been "cardless" for quite some time. In fact, tokenization is the preferred payment method when it comes to e-commerce giants (Amazon, Apple Store, PayPal etc.) Starbucks and top US retailers are now bringing tokenization - via QR codes - into the physical world too.

Payments - online or offline - are about authentication, the rest is accounting. Money is no longer "in the bank": making a payment is now simply the matter of changing records in databases...

Let's put all those elements together:
1. You can do (adequately secure) authentication using just a mobile phone. Or biometrics. Or both.
2. You don't need ANY card at all to make a payment. Online or offline. 

What was that EMV thing again...


Comments: (1)

A Finextra member
A Finextra member 19 February, 2013, 08:32Be the first to give this comment the thumbs up 0 likes

Cash has survived sustained pressure to replace it because people like and trust cash and it is convenient. Cards are now in the same space, trusted, convenient and liked so, I suspect, they will be around for some time to come.

Indeed cards will not be going anywhere until we, in the payments industry, agree what should replace them and develop the infrastructure needed to support the a new identification and authentication token.

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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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