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Credit cards, road maps and chips

by Peter Andrew
Credit cards, road maps and chips

Funny thing, language, isn’t it? For millennia, we had “road maps.” These were… well, maps that showed roads. Then along came GPS satellite navigation, making road maps redundant for many, and the term immediately acquired a whole new meaning: “a detailed plan to guide progress toward a goal,” according to Merriam-Webster. The first time your blogger heard the phrase used in that way, it referred to the attempted peace negotiations in the Middle East. Maybe it’s because that did such a bang-up job of bringing perfect and lasting peace to Israel and Palestine that every two-bit plan is now a road map.

Credit card road maps

Of course, not every road map is two-bit. Some are grand strategy documents. Back in August last year, Visa published its road map (it eschewed Merriam-Webster and spelled it “roadmap”) for the introduction of new technologies for debit and credit cards in the United States, and, on Jan. 30, MasterCard unveiled a similar document. It too called it a “roadmap.”

The nonstandard spelling is far from the only similarity between the two competitors’ documents. In fact, they’re virtually interchangeable. And at the heart of both are two innovations/abbreviations:

  1. EMV (Europay, MasterCard, Visa) — additional layers of security provided by embedding a microprocessor in every debit and credit card.
  2. NFC (Near-Field Communications) — the wireless technology that allows you to make a payment by waving your card, smartphone or similar device near an appropriately enabled terminal.

Paths and milestones

Of course, today NFC payment terminals exist in a limited number of outlets across the country, and a relatively few EMV-compliant credit cards have already been issued, mostly to help travelers avoid problems in overseas territories. What the road maps do is lay down for various interested parties within the industry a list of objectives and “milestones” (management consultant jargon for specific dates when something is anticipated to happen) — defining a path that is supposed to see the foundations for both technologies fully in place within the next two or three years.

Neither EMV nor NFC is particularly controversial. People may question some of the more extravagant security claims made for them, but most experts agree that both are more secure than existing payment systems. And, even if they were to turn out not to be, it’s the credit card companies rather than consumers who’d carry the can. By law, an innocent cardholder is liable only for the first $50 of any fraudulent loss on a credit card, and in practice nearly all issuers waive even that.

NOT Chip and PIN. No, really!

Visa seems to be obsessed by possible resistance to the introduction of the “chip and PIN” form of EMV. Chip and PIN, which is used in most existing EMV territories (and that’s virtually the entire first world outside the United States), requires you to authorize transactions using a four-digit personal identification number (PIN) rather than a signature. Surely, Visa doesn’t think that forward-looking Americans are more resistant to change than people in, say, Europe. MasterCard (see the quote below) seems much more confident in America’s willingness to embrace innovation.

Anyway, Visa says that whether transactions are authorized by signature or PIN or either is going to be down to individual credit card companies, so which one you end up using may depend on your issuer.

MasterCard’s ecosystem

Introducing a new payments system from sea to shining sea is a huge and complex operation. So perhaps all those metaphors (road map, path, foundations, milestones and so on) have a role in making it easier to understand for those who are going to implement it. However, MasterCard has gone one better. It uses the word “ecosystem” no fewer than five times in its press release. For example, one executive comments:

Our roadmap represents a transformational shift in the approach to payments and is not simply about EMV, chip and PIN. We’re focused on readying the ecosystem to drive future innovation and provide new consumer experiences to enhance the value of electronic payments.

What it all means to you

But we simple consumers don’t really need any metaphors or management-speak to understand what’s going to happen:

  • If you choose to use it, NFC may save you a few seconds each time a payment is made by avoiding having to swipe your card.
  • NFC may be inherently more secure than the existing system, if only because you don’t need to hand your credit card to a clerk who might secretly clone it.
  • EMV is undoubtedly more secure than the current magnetic-strip technology, although some challenge just how much more secure.
  • Depending on your choice of credit card companies, EMV may or may not require you to use a PIN rather than signature to authorize transactions.

There. You can save your road maps for when your GPS breaks down.

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