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Is Visa Too Far Ahead of the Pack?

More than four months after Visa Inc. announced a plan encouraging U.S. merchants to embrace the EMV security standard for chip-cards, no other card brand has made a similar move — raising the question among some experts of whether Visa might have acted too soon.

"The fact that no other card brands have stepped up with a similar plan could be a problem," says Tim Buckingham, a partner specializing in banking and merchant acquirer liability issues with the law firm DLA Piper LLP. "I guarantee that merchants will be confused and uncertain about what direction they should go if they don't get a clear sense from other card brands about the future of EMV in the U.S. … Some consensus is needed."

Visa on Aug. 9 announced deadlines and incentives to encourage merchants to adopt the EMV chip standard for point of sale transactions to reduce counterfeit card fraud. By October 2015, liability for fraudulent Visa EMV transactions in most cases will shift to acquirers from issuers if their merchants do not have the proper payment terminals.

Also, Visa said any merchant that by October 2012 accepts 75% of its annual Visa transactions through a terminal that can handle contact and contactless chip transactions will not have to validate their compliance with the Payment Card Industry data security standard.

So far, none of the other major U.S. card brands have outlined plans to push EMV. The closest MasterCard Inc. has come to solidarity with Visa is a September announcement of coming requirements for automated teller machine owners for accepting EMV cards for interregional transactions on its Maestro network. This is a narrower policy than what Visa issued a month earlier. "We would certainly expect MasterCard to come up with its own EMV plan at some point, as they have in other countries, but perhaps they didn't want to be seen as merely reacting to Visa this time," Buckingham says.

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