Eager to exploit new growth opportunities in a sluggish economy, certain payments-industry technology suppliers already are positioning themselves to capitalize on opportunities Visa Inc.’s U.S. EMV chip card initiative may trigger as participants upgrade systems and equipment, observers say.
Visa on Aug. 9 laid out a plan designed to encourage merchants to adopt contact and contactless chip card technology over the next several years to improve security and lay a foundation for mobile-payment development (
A broad range of players, including payment-terminal manufacturers, independent sales organizations, software developers and security experts, likely will see increased demand for products and services as U.S. merchants take steps to accept chip cards, Doug Varble, senior vice president of Compass Plus North America, a St. Louis-based transaction-software developer, tells PaymentsSource.
“Visa’s chip card announcement will probably provide a nice boost for various technology providers within the payments industry over the next several years,” Varble says.
Compass intends to help merchants upgrade their transaction software to suit new point-of-sale terminals equipped for the first time to accept chip cards, he says.
“Merchants will need new software to process transactions coming through chip-equipped terminals, and they will need to update their databases” to qualify for certain incentives Visa intends to offer merchants that deploy contact and contactless chip-equipped hardware, Varble says.
Thales e-Security Inc. also expects Visa’s initiative to help drive demand for its latest software designed for hardware security modules that protect cardholder account information.
The Weston, Fla.-based company on Aug. 15 unveiled what it says is the world’s first software that enables banks and others to securely send mobile-payment applications and customer-account data to the secure element within mobile handsets over the air.
The new feature uses dedicated cryptographic functions for a secure and streamlined approach to installing personal account information on a consumer’s mobile handset, Jose Diaz, Thales director of technical and strategic business development, tells PaymentsSource.
Through a set of proprietary formulas, the new process replaces an earlier one that required “multiple steps that were very time-consuming” and ensures that sensitive account data are not exposed during the process of provisioning a consumer’s handset for mobile payment, Diaz says.
Thales plans to target card issuers with its latest hardware-security module, expanding its customer base beyond merchant acquirers that have been core users of its modules to secure transactions within point-of-sale terminals.
More payment card issuers and third-party providers likely will demand Thales’ new systems to provision handsets for mobile payment if Visa’s initiative succeeds in developing Near Field Communication-based mobile payment across a broad spectrum, Diaz says.
“With Visa’s chip announcement, we expect to see the pace of mobile-payment development pick up, [and] we anticipate strong demand for new products that provide secure transfer of customer account data, which will likely include serving new types of customers,” Diaz says.
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