Home Depot joins chip-and-PIN protest
The Green Sheet: June 24, 2016
Atlanta-based Home Depot Inc. filed a lawsuit against Visa Inc. and MasterCard Worldwide Jun. 15, 2016, to challenge chip-and-signature verification, a practice that has largely defined the rollout of smart card technology in the United States. Home Depot is suing the payment card brands for the right to require PIN with every chip card, affirming the practice as a more secure payment method commonly used in 80 other countries that have implemented EMV (Europay, MasterCard and Visa) technology, including the United Kingdom, France and Australia.
The lawsuit claims that Visa and MasterCard have engaged in interchange “price-fixing” and have made PIN entry optional in order to route PIN-less debit card transactions to higher-priced credit card networks. The home improvement retailer is fighting for the right to mandate PIN entry with all chip cards, including debit and credit, to enhance security and have more control and choice over payment card transaction routing.
Smart cards, smarter fraudsters
Payments industry analysts have stated that using signature with chip cards is an expeditious way to help consumers and merchants migrate from magnetic stripe cards to more secure EMV technology; detractors have argued that using chip cards without PIN authentication is both an inefficient use of the technology and an insufficient deterrent to online fraud.
“[EMV] cards offer an extra layer of security beyond the chip itself, by requiring the user to enter a four-digit PIN, thereby ensuring that the individual using the card is the card’s owner,” the Home Depot lawsuit stated. “Signatures can be copied or forged, and cashiers are not handwriting experts trained to identify forged signatures.”
“Most other countries have implemented chip and PIN, which is generally a more secure payment method than magnetic stripe cards,” said Mark Gazit, Chief Executive Officer of ThetaRay, a global data analytics platform and cybersecurity company. “Retailers need to understand that using chip and PIN technology will deter but not completely eliminate fraud.” [Read the article in The Green Sheet]