Chip and PIN gains influential supporter
The National Retail Federation and the Retail Industry Leaders Association are aligned with the nation’s top law enforcement agency in an effort to ensure consumers have access to the most secure payment methods.
The FBI has released an official advisory warning consumers that EMV-compliant cards are still vulnerable to fraud and PIN authentication is the best means to prevent personal data theft. According to the FBI. EMV cards can still be counterfeited with stolen card data obtained on the black market.
In addition, data on an EMV card’s magnetic strip is still vulnerable to theft via POS malware, and the FBI also supports warnings about EMV cards not being effective in stopping card fraud in online or telephone transactions.
The FBI advises consumers to be vigilant in handling, signing, and activating a card as soon as it arrives in the mail, reviewing credit card statements for irregularities, and promptly reporting lost or stolen credit cards to the issuing bank. More significantly, the FBI is officially endorsing the chip and PIN authentication standard.
“When using the EMV card at a POS terminal, consumers should use the PIN, instead of a signature, to verify the transaction,” says the advisory. “This fully utilizes the security features built within the EMV card. Consumers should also shield the keypad from bystanders when entering their card PIN.”
The FBI further encourages retailers to require consumers to use a PIN for each transaction. If a consumer uses a signature, retailers are advised to ask to also see a government-issued photo identification card to verify the cardholder’s identity.
Card issuers and banks in the U.S. are currently issuing EMV cards that use a signature, rather than a PIN, for user authentication. Retailers cannot require customers to use a PIN for a card issued without one, and card network rules prohibit merchants from requiring a PIN when one exists.
A number of retail trade organizations have been publicly calling for the adoption of chip and PIN, which is the global standard, and this FBI advisory lends them new credibility. The Retail Industry Leaders Association (RILA), which has strongly backed U.S. adoption of chip and PIN, issued a statement in support of the FBI advisory.
“Retailers have long-argued that PINs are essential to providing cardholders with the security that they deserve,” said Brian Dodge, executive VP of RILA. “The FBI’s alert should be a wake-up call to the banks and card networks that continue to stand in the way of making PIN authentication the standard in the U.S. just as it has been around the world for years.”
The National Retail Federation (NRF), another strong proponent of chip and PIN authentication, also released a statement in support of the FBI’s position.
“What the FBI is saying is what the rest of the world already sees as common sense,” NRF senior VP and general counsel Mallory Duncan said. “It’s the right thing to do, and we hope the banks are listening. Retailers are determined to protect their customers. That’s why we are pushing the banks to use all of the security the new cards are capable of providing, not just half. They shouldn’t lock the front door but leave the back door wide open.”