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Two CUs lead in Visa EMV-chip card surge
SAN FRANCISCO (2/21/12)--Two credit unions are at the forefront of the nation's attempt to catch up on the rest of the world's card payments systems by moving from magnetic-strip-based cards to the more secure Europay, MasterCard and Visa (EMV) chip-enabled cards that are popular overseas.

The credit unions--$23 billion asset State Employees' CU (SECU), Raleigh, N.C., and $3.4 billion asset United Nations FCU, Long Island City, N.Y.--were among  just five large financial institutions Visa named as early adopters in its announcement earlier this month  of  Visa Chip Services. Banks named as early adopters were Chase Card Services, U.S. Bank and Wells Fargo.

Visa Chip Services is new suite of services that help card issuers sidestep some of the infrastructure problems involved in authenticating EMV card transactions. Instead, Visa does the authenticating for them.

For example, the service's  iCVV service enables financial institutions to offer a more secure EMV-chip enabled card without costly, time-consuming technology investments. The iCVV is a special code that transmits with each transaction to prove the card is legitimate. It serves the same purpose as a magnetic-stripe card's CVV verification process. Visa converts the iCVV to a CVV before sending the transaction to the issuer, according to Visa's press release.

Another updated service is Visa's Chip Authenticate Service, which SECU uses. The service validates a separate cryptogram used by EMV and minimizes the need for the issuer to make authentication-related host system changes to verify the chip transaction data.

SECU "was able to build on Visa's expertise and solutions to engage quickly and launch an EMV chip card program in a matter of months, not years," said Leanne Phelps, senior vice president, card services at SECU. "The jump-start helped us to be a leader and provide our members the products and services they want and need."

Visa's EMV issuers have introduced chip card programs targeted primarily to international travelers. More than a dozen programs have been introduced since 2010.

As of Dec. 31, U.S. financial institutions had issued one million Visa branded, EMV chip cards. To put that into perspective, 18 months ago no Visa EMV contact chip cards existed in the U.S., Visa said in its news release.

Still a major roadblock continues to be merchants' reluctance to upgrade their terminals to accept the cards. Merchants say they are concerned over whether the U.S.-based chip cards would use the same level of security as the cards overseas (Bank Technology News Feb. 6).


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