Visa Unveils Chip Services As Its U.S. EMV Card Base Crosses the 1 Million Threshold

Visa Inc. reported on Monday that its U.S. financial-institution clients have issued more than 1 million chip cards compliant with the EMV standard. The leading payment card network also introduced new EMV processing services so that issuers can reduce their own investments in chip technology.

Just over 10 issuers now offer EMV contact chip cards, Stephanie Ericksen, Visa’s head of authentication product integration, tells Digital Transactions News. A “significantly higher” number of issuers offer the Visa payWave contactless card, which meets standards set by EMV’s contactless protocol, she says.

Leading issuers of Visa contact chip cards include Wells Fargo & Co., JPMorgan Chase & Co., State Employees Credit Union, United Nations Federal Credit Union, and U.S. Bancorp. These issuers are aiming most of their chip cards at customers who travel abroad to EMV countries and may encounter difficulties using conventional magnetic-stripe credit and debit cards.

Wells Fargo last year began a pilot in which it issued 15,000 EMV chip cards to frequent foreign travelers. A spokesperson for the San Francisco-based bank says the test has been “very successful” and that Wells plans to increase its chip card base, though the spokesperson won’t say when or by how much.

“We’ve been pleasantly surprised” by the banks’ experiences, says Ericksen. Banks typically started issuing EMV cards in quantities of 10,000 to 15,000 at a time to their traveling customers. As word spread about those cards, “they had other cardholders calling in asking if they could get a chip on their card,” she says. Despite the apparent growing demand, Visa won’t predict how many EMV chips cards might be in issue in the U.S. by year’s end.

Visa last year released a plan to migrate the U.S. to EMV chip cards and mobile payments based on near-field communication (NFC) technology, a plan that gives a break to merchants on validation with the Payment Card Industry data-security standard (PCI) if they install EMV-compliant chip-reading terminals. And even though EMV cards in Europe typically call for the cardholder to enter a PIN with each purchase, hence the common term “chip and PIN,” Visa’s U.S. EMV plan de-emphasizes static, or offline, PINs in favor of so-called dynamic authentication that uses one-time codes. That’s raised eyebrows among some merchants and processors that want to retain the PIN. The EMV plan MasterCard Inc. announced Jan. 31 assigns a much more prominent role to the PIN. (Also, most U.S.-issued Visa EMV cards so far rely on signature authentication.)

Ericksen says MasterCard’s plan “is a good sign” that both bank card networks are committed to EMV. And she adds that “we haven’t necessarily gotten push-back” about the role of the PIN. “I think the industry has been pretty supportive of our position,” she says. Issuers under Visa’s plan are free to require signatures or PINs, but offline PIN authentication has more operational complexities than dynamic authentication that uses online connections, she says.

In related news, Visa on Monday unveiled what it calls Visa Chip Services, a suite of services that “will help issuers adopt the latest payment technologies efficiently and with minimal infrastructure investment,” the company said in a news release. They include Visa Chip Authenticate, a service in which Visa validates the EMV cryptogram on behalf of the issuer, “minimizing the need for issuers to make authentication-related host system changes to verify chip transaction data,” the release says.

Another service, Visa iCVV Convert, reduces issuer’s required system changes by converting the chip-based ICC Card Verification Value (iCVV) to the mag-stripe-based CVV and removing the chip data before sending the transaction to the issuer for review and response. The CVV is the three-digit security code on the back of the card.

Two other new services, Visa Streamlined Chip Setup and Visa Custom Chip Setup, provide startup services for chip programs depending on the issuer’s online or offline processing requirements.