Bank of America Merrill Lynch is expanding chip and PIN technology to all purchasing and travel credit card products available to clients in the United States, the company announced Monday, as it continues its effort to rollout EMV technology to customers around the world.
EMV, which stands for Europay, MasterCard, and Visa, uses an embedded microchip and a personal identification number (PIN) to validate the card, the consumer, and the payment transaction instead of a cardholder’s signature. The technology is popular in countries outside the U.S.
The Chip and PIN solution provides customers with improved security and acceptance, offering greater control over fraud since Chip point-of-sale (POS) terminals are more commonly brought directly to the customer who then enters a PIN number to complete the transaction, often not having to hand the card over.
“We’re committed to providing the most technologically advanced solutions, which our clients increasingly need to improve efficiencies while adding another layer of security,” said Kevin Phalen, head of Global Card and Comprehensive Payables in Global Transaction Services (GTS). “More of our clients are asking for chip and PIN capability – not just for their key executives but for their entire employee base – and we have directed significant investments into our card platform to meet that demand.”
BofA Merrill first introduced chip and PIN technology on corporate travel and expense (T&E) credit cards in Europe in 2010 and in the United States in 2012.
“Chip-enabled cards allow the employees of our clients to travel the world safe in the knowledge that their cards will be accepted at any point of sale,” added Phalen.
The bank began issuing chip-enabled purchasing cards in 2013. Together with T&E cards, more than 100,000 chip and PIN cards across the portfolio have been issued to clients in the United States alone. That number will grow as all newly issued credit cards for middle-market and large corporate clients will feature EMV technology, the company said.
“As our clients’ employees travel abroad, they are increasingly finding chip technology to be critical to a smooth experience,” said Dub Newman, head of GTS, North America. “While EMV technology is widely adopted across Europe and other regions, it has only recently received traction in the United States. We anticipate the demand for EMV will continue to grow in the U.S. and our decision to expand the technology today will position our clients to stay ahead of the curve.”
Earlier this year, Target Corp. said it would equip its own “REDcards” and all of its store card readers in the U.S. with chip-enabled smart-card technology by the first quarter of 2015, more than six months ahead of previous plans. The accelerated timing is part of a $100 million effort to put in place chip-enabled technology in all of Target’s nearly 1,800 U.S. stores, the company said.
Migration to EMV Inevitable But Expensive
Back in February 2011, former SecurityWeek columnist Christopher Justice commented on how 50-year-old plus magnetic stripe technology enables criminals to skim information directly from the cards with simple card reading devices or recreate payment cards using stolen payment card data.
“The migration will be neither fast nor inexpensive, requiring a hefty investment in new technology and new processes,” Justice wrote in a SecurityWeek column at the time. “Both merchants and consumers will need to continue to build a compelling business case for migration to chip and PIN cards in order to convince issuers and acquirers to change the payment infrastructure that is currently in place.”
However, the migration to EMV in the U.S. is inevitable, Justice said. “We can anticipate that there will continue to be a strong push to migrate to a new chip and PIN payment architecture in the United States, fueled by multi-national merchants who have seen fraud/chargeback benefits from implementations in other parts of the world.”
The recent breaches at Target, Nieman Marcus, Michaels Stores and White Lodging have built an incredible case to fuel the adoption of EMV technology in the US.
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Related Reading: Bank of America Starts Rollout of Chip Credit Cards to Consumers