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Can the U.S. Meet Visa’s Plans to Adopt New Technology?

Can the U.S. Meet Visa's Plans to Adopt New Technology

Visa’s on a mission these days and it’s sure to means big changes with the way you spend your money and the confidence you have in credit card security. With the transition from mag stripes to much safer EMV chips, the likelihood of fraud is sure to decrease anytime you use your debit or credit cards or your smartphone.

In early August, Visa announced plans that it intended to speed up the process of chip migration and mobile payments in the United States, an effort that’s already been completed successfully in Europe. For a few years, many Americans have found themselves at a disadvantage when traveling abroad if they could not find merchants who used the traditional stripes you see on the back of your credit cards.

Many merchants throughout Europe had extended the courtesy of accepting both EMV and the mag stripes for quite some time, but now, the transition is complete and if your credit card doesn’t incorporate these new features, there’s a good chance your credit card is useless in Europe. Needless to say, the need for this transition is long overdue.


It helps to understand exactly what this new technology means. First, EMV means “Europay, Mastercard and Visa” and these improvements mean embedded microprocessors that keep you far safer from credit card hacks, physical theft and internet scams.

The safety benefits are more than impressive and the only reason these new chips haven’t been incorporated in the U.S. is because of the costs associated with the new systems. Merchants wanted to be sure it was a technology that was here to stay and credit card companies didn’t want to make the investments until they were sure they’d be embraced by merchants. These back and forth dynamic has hit a brick wall, though as there are no more reasons to delay the changes. Europe has made the transition and for Americans who travel, they now are demanding the new technology.

Credit, Debit and Mobile

This new push by Visa will be applicable across the board. It applies to credit and debit cards, as well as the new mobile payment processing systems our smartphones are now equipped with. It’s all about “contactless” payments. Until now, the mobile carriers have been most open to the new technology, after all, they built it into their new models and will continue to do so. It was the classic merchants, including brick and mortar dynamics, that were a bit hesitant due to the costs, frustration of having to learn new technology and the resistance to change.

The Changes

Visa calls the new chip technology “dynamic” and is supporting three simultaneous initiatives. First, it’s made October 12, 2012 as its goal for expanding its chip acceptance to every merchant and mobile carrier. It’s also writing new compliance laws in terms of the responsibilities of merchants to their consumers; they simply shift. Not only that, but the new changes will also shift the financial responsibilities associated with fraud to the merchants if they’ve not incorporated the changes.

Part two includes a requirement that all service providers have chip acceptance built into any hardware it uses, including fuel pumps (though there is an additional time period that will be extended for gas pumps). They must be EMV supported, though, within a year after any extension is granted. The third transition includes what it refers to a counterfeit fraud liability shift. By 2015, for those merchants who have made the transition, they will be held liable for counterfeit or fraudulent activity. Currently, the credit card companies shoulder the financial burdens of fraud.

Other Considerations

Visa also points out that many American companies have international interests. It specifically names McDonald’s and its dual-technologies it must use. Once the transition is made, it will be able to leave the mag strip methods behind as it transitions in America what it’s already achieved in other countries.

Finally, Visa states there is no “security silver bullet”, though it does reiterate the stronger “layer for payment transaction security, online banking and access to medical records and more.” The future has arrived and ready are not, you’ll soon be carrying it in your wallet.

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