US Chip & Signature --> Chip & PIN 2020

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Phineas J. Whoopee
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US Chip & Signature --> Chip & PIN 2020

Post by Phineas J. Whoopee »

An article at Bankrate.com from last Friday, the 17th of October, says the US is meant to get Chip & PIN in 2020. We'll have Chip & Signature until then. Of course, that's far enough in the future that plans can change.
Claes Bell at Bankrate.com wrote:...
Unlike the European version of EMV, American debit card holders won't have to use a PIN when they make credit card type purchases right away -- unlike the European version of EMV cards -- but that shift is coming in 2020, [Carolyn] Balfany [Senior VP of Product Delivery at MasterCard] says.
...
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Sidney
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Re: US Chip & Signature --> Chip & PIN 2020

Post by Sidney »

I wonder why they are dragging their feet. If the phone guys get some critical mass they may change their minds.
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TheTimeLord
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Re: US Chip & Signature --> Chip & PIN 2020

Post by TheTimeLord »

Apple pay with single use numbers seem to be a winner to me.
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nordsteve
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Re: US Chip & Signature --> Chip & PIN 2020

Post by nordsteve »

I'm not an expert in it, but reading up on Wikipedia about the difference between chip and pin vs chip and signature, it seems like both protect against mass disclosure of credit card credentials. It seems like requiring the PIN mostly helps prevent use of the card in offline situations after it's been lost. I'd be happy to defer to someone with more expertise in this area, though.
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ResearchMed
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Re: US Chip & Signature --> Chip & PIN 2020

Post by ResearchMed »

stevep001 wrote:I'm not an expert in it, but reading up on Wikipedia about the difference between chip and pin vs chip and signature, it seems like both protect against mass disclosure of credit card credentials. It seems like requiring the PIN mostly helps prevent use of the card in offline situations after it's been lost. I'd be happy to defer to someone with more expertise in this area, though.
My understanding is that the PIN is coded in the chip, and there's not (usually? always?) a way to change it.
So if the card is lost and someone else finds it, then it wouldn't be of much use, either, because that person wouldn't know the PIN.

That should also help if lost with preventing "online" use as well. Right now, the "security code" is printed right on the card itself, so anyone in possession of it would be able to see it.

This seems to be "back to the original" debit card with PIN, but it's coded in the chip.
And it seems like a very good idea.

I wish the USA wouldn't drag their feet on it, both for domestic use and especially as the Chip/PIN card is increasingly required overseas (or in Europe, at least).

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denovo
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Re: US Chip & Signature --> Chip & PIN 2020

Post by denovo »

2020, that's such ****. However, hopefully businesses get it done faster than that.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by dgdevil »

It's shocking how far USA is so far behind the rest of the world in basic tech. I get stronger Wifi in Ho Chi Minh City than in California; the whole of Tel Aviv is a free wifi zone; whole African countries pay for goods by swiping their cell phones. Chip and pin will be ancient, fuddy-dud stuff by 2020.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by jebmke »

dgdevil wrote:It's shocking how far USA is so far behind the rest of the world in basic tech. I get stronger Wifi in Ho Chi Minh City than in California; the whole of Tel Aviv is a free wifi zone; whole African countries pay for goods by swiping their cell phones. Chip and pin will be ancient, fuddy-dud stuff by 2020.
No kidding. We still use little pieces of paper with our signature on it to transfer money around. But, in our defense, many of our banks let us take pictures of those little pieces of paper so we don't have to use the mail to deposit them.
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crg11
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Re: US Chip & Signature --> Chip & PIN 2020

Post by crg11 »

StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
I tried Apple Pay for the first time today. Worked flawlessly. Loved how easy it was and the fact the receipt clearly showed a different (tokenized) card #.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by helix »

Maybe it is just me, but Chip & Signature seems much more convenient (no need to remember an additional PIN for each CC)
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Re: US Chip & Signature --> Chip & PIN 2020

Post by madbrain »

Sidney wrote:I wonder why they are dragging their feet..
On the chip part, the US has been dragging their feet because of the cost to buy new readers.
On the PIN part, I think it's the card issuers.

I grew up in France, and I had one bank card with a chip, on the "carte bleue / VISA" networks, which I had to pick up in person at the branch, and there was a renewal fee every time to cover the cost of the chip. I had very little in the way of assets, and thus had only one bank account with one card. I had no access to credit. This card was considered a "credit card" in the sense that charges wouldn't be debited from my checking account until the next month .
I could choose either this option, or to have charges post immediately to the account, like a debit card in the US.
Credit cards in the style of US cards, with revolving balances, were much less common over there. Consumer credit has always been much less available in France than in the US. The European banks are far more conservative, and you would probably have to go through bodily cavity searches - I joke, I haven't ever tried to apply for credit there - I just know they don't give it easily, certainly not to anyone without verified income.

Here in the US, I have many cards. I carry as many as 5 usually in my wallet. At least one ATM/debit card for cash access, and 2 reward credit cards (Amex and VISA). And then I sometimes have a few more cards, maybe another ATM for a different bank account, or another credit card for an individual account.
And I have maybe 10 more unused cards in a drawer at home.

I only need to remember the PINs for the ATM cards, of which I carry at most 2, and usually just one. The PIN is only needed for cash access, and the ATM machines in the US must all be online in order to verify your PIN and account balance.
If I had to remember the PIN for 4-5 cards, and the PIN was embedded into the chip, and could not be changed to be the same one for multiple cards (as it can for ATM PINs), that would be a lot of PINs to remember. I would probably stop carrying some of the cards.

The US card issuers will need to change their process and let you select your PIN ahead of time, before the card is manufactured. And if you ever need to change the PIN, they will need to make a new card for you. This is obviously more costly for them.

What's crazier right now is the "chip and signature" intermediate, where some vendors still don't take the chip cards, and the card number can still be compromised by magstripe. FIA card services has had to remanufacture at least 10 chip cards for me and my husband for our joint Fidelity VISA/Amex credit cards because of fraud with the card numbers just in the last year ! And there is no sign of that stopping. I have no idea exactly where the fraud happens. Could be at any US merchant, or online. The only place I have ever used the chip in the US is Wal-mart (!).

Of course, the problem of using the credit card chip for online purchases has not been solved, either. It may be a long time coming before every computer, cell phone, or tablet, can interface with a card reader and use the chip card, as opposed to one manually copying the card number, which is insecure.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by madbrain »

helix wrote:Maybe it is just me, but Chip & Signature seems much more convenient (no need to remember an additional PIN for each CC)
I think that's the main reason US card issuers are resistant. Any PIN change means the card must be manufactured again.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by Ged »

StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
Here is one case where Apple may prove to have more marketing clout than Google in a very important way. Google Wallet which has been around for 3 years uses the single use number concept over NFC just as Apple Pay does. For one reason or another it hasn't caught on.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by TheTimeLord »

Ged wrote:
StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
Here is one case where Apple may prove to have more marketing clout than Google in a very important way. Google Wallet which has been around for 3 years uses the single use number concept over NFC just as Apple Pay does. For one reason or another it hasn't caught on.
The key is that Apple users are higher income higher spend customers that retailers want to attract.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by madbrain »

StarbuxInvestor wrote:
Ged wrote:
StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
Here is one case where Apple may prove to have more marketing clout than Google in a very important way. Google Wallet which has been around for 3 years uses the single use number concept over NFC just as Apple Pay does. For one reason or another it hasn't caught on.
The key is that Apple users are higher income higher spend customers that retailers want to attract.
I wonder how true that is, I know plenty of low-income people that use Apple products.
With the number of iPhones Apple churns, their business wouldn't be sustainable if only higher-income customers could afford them.
I will agree that iPhones are priced higher than the competition, but the real extra cost is often disguised through carrier subsidies in the US.
Many low-income people simply don't realize that there are better deals to be had over the long run, if they choose cheaper devices.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by TheTimeLord »

madbrain wrote:
StarbuxInvestor wrote:
Ged wrote:
StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
Here is one case where Apple may prove to have more marketing clout than Google in a very important way. Google Wallet which has been around for 3 years uses the single use number concept over NFC just as Apple Pay does. For one reason or another it hasn't caught on.
The key is that Apple users are higher income higher spend customers that retailers want to attract.
I wonder how true that is, I know plenty of low-income people that use Apple products.
With the number of iPhones Apple churns, their business wouldn't be sustainable if only higher-income customers could afford them.
I will agree that iPhones are priced higher than the competition, but the real extra cost is often disguised through carrier subsidies in the US.
Many low-income people simply don't realize that there are better deals to be had over the long run, if they choose cheaper devices.
http://www.comscore.com/Insights/Blog/A ... hould-Know

iPhone Users are Slightly Younger and More Affluent
iOS is popular among a slightly younger demographic than Android users, with 18-24 year olds representing 19 percent of all iPhone owners compared to 16 percent of Android owners. That said, Android users on the whole skew younger than the total U.S. mobile market, indicating that they still have a very attractive profile on this dimension. Another important demographic difference is average household income, with 41 percent of iPhone owners falling in the $100,000+ income segment vs. 24 percent of Android owners.

iPhone Users More Likely to Engage in M-Commerce
One of the more important mobile trends to develop over the past year is the emergence of m-commerce, where smartphone owners actually make purchases on their phones. Once again, iPhone users show a greater propensity to engage in this behavior with 23 percent having done so vs. 17 percent of Android owners. iPhone owners are also more likely to make purchases on their phones on a regular basis. These are important considerations for both retail app developers and those seeking to monetize via paid apps or in-app purchase.

http://techcrunch.com/2012/09/26/forres ... kew-older/
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nordlead
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Re: US Chip & Signature --> Chip & PIN 2020

Post by nordlead »

StarbuxInvestor wrote:
madbrain wrote:I wonder how true that is, I know plenty of low-income people that use Apple products.
With the number of iPhones Apple churns, their business wouldn't be sustainable if only higher-income customers could afford them.
I will agree that iPhones are priced higher than the competition, but the real extra cost is often disguised through carrier subsidies in the US.
Many low-income people simply don't realize that there are better deals to be had over the long run, if they choose cheaper devices.
http://www.comscore.com/Insights/Blog/A ... hould-Know

iPhone Users are Slightly Younger and More Affluent
iOS is popular among a slightly younger demographic than Android users, with 18-24 year olds representing 19 percent of all iPhone owners compared to 16 percent of Android owners. That said, Android users on the whole skew younger than the total U.S. mobile market, indicating that they still have a very attractive profile on this dimension. Another important demographic difference is average household income, with 41 percent of iPhone owners falling in the $100,000+ income segment vs. 24 percent of Android owners.

iPhone Users More Likely to Engage in M-Commerce
One of the more important mobile trends to develop over the past year is the emergence of m-commerce, where smartphone owners actually make purchases on their phones. Once again, iPhone users show a greater propensity to engage in this behavior with 23 percent having done so vs. 17 percent of Android owners. iPhone owners are also more likely to make purchases on their phones on a regular basis. These are important considerations for both retail app developers and those seeking to monetize via paid apps or in-app purchase.

http://techcrunch.com/2012/09/26/forres ... kew-older/
Android controls ~53% of the market, while Apple has ~36% (in this report, the numbers are different now).

So, if we work out the numbers based on what is provided here, out of Android/Apple smartphone owners who make $100k or more, 52% use Apple, and 48% use Android. Basically, they are pretty even for affluence, Android just has a lot more people on the low income side too.

In terms of age, out of Android/Apple smartphone users who are 18-24, 44.5% use Apple and 55.5% use Android, which shows that young people "prefer" android (I say "prefer", as they may not have had a choice at 18).

Again, due to the much larger userbase on Android, more people have used Android for m-commerce than Apple (47.8% used Apple vs 52.2% used Android).

What we can conclude from the data above, is that Google has invited everyone to the table, while Apple is exclusive. This may be attractive to advertisers though, since they can randomly advertise to any Apple user and have a better chance of hitting their target 18-24 year old who has money to blow. This reduces their advertising costs, as the chance of success is higher so less total ads are needed.

You can spin the numbers how you see fit.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by richard »

PINs can be changed with Chip & PIN cards, at least most versions. You have to go to an appropriate machine, such as an ATM with the necessary facilities. Unfortunately, the US lacks the infrastructure.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by jebmke »

richard wrote:PINs can be changed with Chip & PIN cards, at least most versions. You have to go to an appropriate machine, such as an ATM with the necessary facilities. Unfortunately, the US lacks the infrastructure.
At our bank, we were able to set our PINs on our cards when we lived in Europe so I know the technology existed in 2003.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by nordlead »

Ged wrote:
StarbuxInvestor wrote:Apple pay with single use numbers seem to be a winner to me.
Here is one case where Apple may prove to have more marketing clout than Google in a very important way. Google Wallet which has been around for 3 years uses the single use number concept over NFC just as Apple Pay does. For one reason or another it hasn't caught on.
Google Wallet was first to market, which doesn't always pan out well. Not many terminals have NFC readers (Target and Walmart are two big players who never upgraded terminals, and still wouldn't if it weren't for fraud liability being forced on them). Google also didn't aggressively start up. They did it gradually, going from only working on Nexus devices to working on all NFC devices, and going from 1 CC to lots of CCs.

Apple on the other hand is basically joining the group at about the best time possible. Right as every retailer has to change terminals or be responsible for fraud. Not too late to the market. Apple got lots of CCs on board day 1. Apple released it with huge fan fare at a conference. That, and Apple gets a lot of attention in the US despite since they are 36% of the smartphone market. Apple also passes all of the information through to the CC, unlike Google which lost some use due to everything being billed to the CC as Google. Apple also has Touch ID, which does make it ever so slightly more convenient and secure.

So, 3 days into Apple pay, and yes they had a better start, but it is too early to declare that Apple Pay has done more/better than Google Wallet. Odds are it will since it'll have a more robust start. But still the lack of NFC terminals may put Apple Pay squarely where Google Wallet is. It'll be interesting to see how things go over the next year.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by TheTimeLord »

nordlead wrote:
StarbuxInvestor wrote:
madbrain wrote:I wonder how true that is, I know plenty of low-income people that use Apple products.
With the number of iPhones Apple churns, their business wouldn't be sustainable if only higher-income customers could afford them.
I will agree that iPhones are priced higher than the competition, but the real extra cost is often disguised through carrier subsidies in the US.
Many low-income people simply don't realize that there are better deals to be had over the long run, if they choose cheaper devices.
http://www.comscore.com/Insights/Blog/A ... hould-Know

iPhone Users are Slightly Younger and More Affluent
iOS is popular among a slightly younger demographic than Android users, with 18-24 year olds representing 19 percent of all iPhone owners compared to 16 percent of Android owners. That said, Android users on the whole skew younger than the total U.S. mobile market, indicating that they still have a very attractive profile on this dimension. Another important demographic difference is average household income, with 41 percent of iPhone owners falling in the $100,000+ income segment vs. 24 percent of Android owners.

iPhone Users More Likely to Engage in M-Commerce
One of the more important mobile trends to develop over the past year is the emergence of m-commerce, where smartphone owners actually make purchases on their phones. Once again, iPhone users show a greater propensity to engage in this behavior with 23 percent having done so vs. 17 percent of Android owners. iPhone owners are also more likely to make purchases on their phones on a regular basis. These are important considerations for both retail app developers and those seeking to monetize via paid apps or in-app purchase.

http://techcrunch.com/2012/09/26/forres ... kew-older/
Android controls ~53% of the market, while Apple has ~36% (in this report, the numbers are different now).

So, if we work out the numbers based on what is provided here, out of Android/Apple smartphone owners who make $100k or more, 52% use Apple, and 48% use Android. Basically, they are pretty even for affluence, Android just has a lot more people on the low income side too.

In terms of age, out of Android/Apple smartphone users who are 18-24, 44.5% use Apple and 55.5% use Android, which shows that young people "prefer" android (I say "prefer", as they may not have had a choice at 18).

Again, due to the much larger userbase on Android, more people have used Android for m-commerce than Apple (47.8% used Apple vs 52.2% used Android).

What we can conclude from the data above, is that Google has invited everyone to the table, while Apple is exclusive. This may be attractive to advertisers though, since they can randomly advertise to any Apple user and have a better chance of hitting their target 18-24 year old who has money to blow. This reduces their advertising costs, as the chance of success is higher so less total ads are needed.

You can spin the numbers how you see fit.
iPhone users also tend to be the most affluent of all, with an average household income of $105,200, with Android trailing on that count with average income of $89,300. That’s a key metric for developers and brands looking to recoup the investment associated with creating software, since it stands to reason that customers with access to more disposable income represent a better target market, all other factors being equal.

I would also bet iPhone users are more brand aware another positive for retailers.
Last edited by TheTimeLord on Thu Oct 23, 2014 9:44 am, edited 1 time in total.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by jebmke »

StarbuxInvestor wrote:iPhone users also tend to be the most affluent of all, with an average household income of $105,200, with Android trailing on that count with average income of $89,300. That’s a key metric for developers and brands looking to recoup the investment associated with creating software, since it stands to reason that customers with access to more disposable income represent a better target market, all other factors being equal.
But don't higher income consumers tend to spend a lower percentage of their income?
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TheTimeLord
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Re: US Chip & Signature --> Chip & PIN 2020

Post by TheTimeLord »

jebmke wrote:
StarbuxInvestor wrote:iPhone users also tend to be the most affluent of all, with an average household income of $105,200, with Android trailing on that count with average income of $89,300. That’s a key metric for developers and brands looking to recoup the investment associated with creating software, since it stands to reason that customers with access to more disposable income represent a better target market, all other factors being equal.
But don't higher income consumers tend to spend a lower percentage of their income?
Maybe but 10% of a million is still more than 100% of $50,000 but more to the point they have higher discretionary spend and less likely to be price sensitive and more likely to be attracted by using something like Apple Pay instead of just price.
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Sidney
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Re: US Chip & Signature --> Chip & PIN 2020

Post by Sidney »

Hard to know how it plays out. In my cohort (retirees), tilt toward Apple because it is easier to use and tends to be not as buggy. But this cohort isn't about to start using their phones to shop. You'll have to pry their credit cards out of their cold, dead hands. Some of them still write checks at the grocery store. Lots of luck getting them on to Apple Pay.

If pay by phone starts to get significant, the retailers will insist on a multi-platform environment. They can't afford to be selective with only Apple hardware.
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Re: US Chip & Signature --> Chip & PIN 2020

Post by Alex Frakt »

Locked. Not actionable (for a few more years).
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