Retail Federation cheers JPMorgan Chase switch to chip and PIN

Retail Federation cheers JPMorgan Chase switch to chip and PIN

The National Retail Federation has called on American banks to follow the lead of JPMorgan Chase and move to chip and PIN credit cards, rather than chip and signature.

The US is set to follow Europe by introducing EMV chip cards over the next couple of years, with liability for fraud-related loses switching to retailers that have not upgraded their hardware in October 2015.

However, the recent Target data breach has given added urgency to the migration, with regulators and lawmakers urging issuers and retailers to roll out the technology as quickly as possible.

Back in 2012 Visa made clear that the introduction of EMV cards will not necessarily mean chip and PIN, arguing that "we can rely on online processing where transactions are transmitted in real-time to the issuer for approval. With that in place, there's no need for the offline authentication that was the genesis of chip-and-PIN."

JPMorgan Chase has been issuing chip and signature credit cards but, in the post-Target environment, has decided to switch to chip and PIN, says the National retailers Federation.

According to Digital Journal, Jamie Dimon, CEO, JPMorgan Chase, said during a recent earnings call: "All of us have a common interest in being protected, so this might be a chance for retailers and banks to for once work together, as opposed to sue each other like we've been doing the last decade,"

NRF president and CEO Matthew Shay has welcomed the latest move: "Use of a PIN is absolutely essential to providing merchants and their customers with the full extent of protection available from chip-based cards.

"The chip authenticates that a card isn't a counterfeit but it's the PIN that ensures the card is being used by its actual owner and not a thief scrawling an illegible signature. Chip-and-signature cards just don't offer the level of protection needed to help stop criminal hackers from making money off payment card data."

Comments: (3)

Nick Collin
Nick Collin - Collin Consulting Ltd - London 28 February, 2014, 16:291 like 1 like

A very positive development - chip and PIN has got to be the only sensible way forward.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 28 February, 2014, 18:34Be the first to give this comment the thumbs up 0 likes

As others debate on PIN versus Signature, the regulator in India has mandated PIN + Signature since December 2013. The tighter security will definitely bring down card fraud. Going by initial experience, the greater friction will also bring down card transactions. I made two payments today by cash that I've been making by credit card for the past 10 years. Reason? The merchants in question - MNO and satellite TV provider - couldn't get their POS machines to accept PIN, so they refused to accept credit / debit cards altogether.

A Finextra member
A Finextra member 28 February, 2014, 22:47Be the first to give this comment the thumbs up 0 likes

Nick, you are so right. Once again it is the retailers in the USA leading the way and promoting the only logical way to introduce Chip Cards.

Mike Green