Tuesday, August 9, 2011

Visa Announces Plan to Drive Chip Card and Mobile Payment Adoption

Visa Inc. announced plans to accelerate the migration to EMV contact and contactless chip technology in the United States. EMV stands for Europay, MasterCard and VISA, a global standard for inter-operation of integrated circuit cards (IC cards or "chip cards") and IC card capable point of sale (POS) terminals and automated teller machines (ATMs), for authenticating credit and debit card transactions.

The importance of the move is that it moves Visa in the direction of "wave" mechanisms rather than "swipe" mechanisms. The change might seem subtle, and in some ways might be viewed that way, but the shift to chip-based authentication means consumers will be able to use either card-based or phone-based "wave" operations rather than "swipe" operations to pay for merchandise.

The adoption of dual-interface chip technology will help prepare the U.S. payment infrastructure for the arrival of near field communications mobile payments by building the necessary infrastructure to accept and process chip transactions that support either a signature or PIN at the point of sale.

Visa says it now is leading the way for the widespread commercial deployment of EMV technology in the U.S. market. That, in turn, is expected to provide a commercial framework to support the acceleration of NFC-based mobile payments.

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