‘Chip-And-PIN’ Cards Prevent Fraud Best: RILA
The results of a national survey of financial professionals endorsing “chip-and-PIN” cards as the best way to prevent fraud is getting a thumbs-up from the Retail Industry Leaders Association (RILA).
“Retailers have known for a long time that the future of payment card security belongs to ‘chip-and-PIN’, and we are readying our stores for this transition,” said Sandy Kennedy, president of RILA.
The Association of Financial Professionals (AFP) – which represents top finance executives around the world – released the results of a J.P. Morgan-supported survey in which respondents expressed overwhelming optimism about the potential for next-generation payment cards to reduce fraud. Of the different types of chip-based “smart” cards available, six of 10 (61 percent) of financial professionals reported that cards with personal identification number (PIN) verification would be more effective than those that verify purchases by signature. Only 7 percent put their support behind “chip-and-signature” cards.
Europay, MasterCard and Visa — known collectively as EMV — set an October deadline for U.S. issuers and merchants to migrate from magnetic stripe cards to the EMV chip-card technology. The new chip cards can be authenticated with a PIN number or a signature.
The survey “should serve as a call to action for card vendors,” Jim Kaitz, president and CEO of AEP, said. “Financial professionals clearly prefer chip-and-PIN over chip-and-signature in the fight against fraud, and they overwhelmingly believe in EMV.”
The American people are ready for “chip-and-PIN” as well, according to RILA’s Kennedy, who said 82 percent of cardholders expressed support for these cards in a separate survey conducted last November.