In August 2011 Visa announced they were switching all their cards in the US from magnetic strip technology to EMV chip technology. By the end of 2011 penetration had reached 1 million cards. In February 2012 Mastercard announced they were following suit and would replace all their magnetic strip cards in the US with EMV chips by April 2013, though they are not promoting near field technology such as that used by Google Wallet.
EMV chip and PIN has been used in Europe since the mid ’90s where card transactions are authenticated by a 4 digit PIN rather than by the customers signature.
The move towards EMV technology in the US is a move to reduce card fraud and also to reflect the changing habits of consumers. Both Visa and Mastercard reflected this in statements released in early 2012.
Mastercard stated we are ‘moving to a world beyond plastic’ and indicated the importance of properly accommodating ecommerce and mobile.
Visa have said it is not their intention to move simply from signature verified transactions to verification by 4 digit PIN. They have made it clear the EMV chip technology used in the VISA cards currently being issued supports verification by cardholder signature, PIN and “no signature required”.
One advantage of the new EMV technology being used is to prevent fraud. Both VISA and Mastercard have stated they will be using dynamic authentication with the new cards. This means cards can’t be duplicated.