MasterCard and Visa have formed a new group to improve efforts in the U.S. to migrate to the EMV-chip cards other security methods.
The cross-industry group will include representation from banks of all sizes, credit unions, acquirers, retailers, terminal manufacturers, and industry trade groups, the card brands say. The group was formed to improve collaboration and cooperation on security issues, with the ultimate goal of maintaining consumer confidence and trust.
Such collaboration is necessary, as the current atmosphere in payments has bred rivalries like those in "West Side Story," says Al Pascual, senior analyst for Javelin Strategy & Research.
"Left to their own devices, we may still end up with this Sharks vs. Jets thing going on it's nothing new that retailers and the financial industry don't tend to get along for a variety of reasons, but with all of the breaches and scrutiny from legislators, they've really kind of been at each other's throats," Pascual says.
Neither group wants to get up in front of Congress and say that the industries could never cooperate with each other, Pascual says. "This is a way to get it all on the table."
Already, the group has been received positively by key constituents in each industry, MasterCard says. The card networks "spoke with a range of senior executives at retailers, financial institutions and manufacturers to gauge their interest in this working group" before its launch, says MasterCard spokesperson Seth Eisen.
Because the group is new, Visa and MasterCard declined to be interviewed further on their initiative.
Even with most entities agreeing that beefed up card security is needed, there is still significant conflict over the proper approaches. A new group could possibly help get all parties on the same page and work past the issues, Pascual adds.
But perhaps there are still some differences to be overcome.
One major sticking point in the U.S. shift to EMV cards has been whether issuers should require consumers to use a PIN to make EMV payments. Visa has openly supported using signature authentication as an easier and cheaper method to deploy.
Shortly after Visa and MasterCard announced their cross-industry group, the National Retail Federation issued a statement about how it wants the group's efforts to proceed.
"We remain insistent that U.S. retailers' customers be given the same protections as consumers in more than 80 countries who have both a chip and a PIN securing their credit and debit cards," NRF senior vice president and general counsel Mallory Duncan said in a prepared statement.
Pat Carroll, executive chairman of security vendor ValidSoft, supports the effort for quicker EMV migration, but says the payments industry has to be aware that any technology calling for the use of payment cards at a physical point of sale may have to change.
"The industry must be fully cognizant of how payments and fraud is evolving," Carroll says in a prepared statement. "There is a grave danger that it will find itself having spent billions of dollars on new cards and POS devices capable of processing chip-and-PIN, only to find that both consumers and the crooks have moved on."
In addition to addressing the EMV migration issue, the new group intends to be a catalyst for other security technologies such as tokenization and end-to-end encryption, both methods of replacing payment card details with data that cannot be exploited by fraudsters if it is stolen.
"The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security," Visa president Ryan McInerney states in a March 7 press release. "As we have long said, no one industry or technology can solve the issue of payment system fraud on its own."
Group members will share ideas, break down barriers and "spur the adoption of next- generation security solutions for the benefit of all," McInerney adds.