Recently, the Secure Remote Payments Council (SRPc) announced the formation of a PIN debit working group. This group will lead the important work of defining a common standard for chip and PIN acceptance among the PIN debit networks. At the STAR® Network, we are thrilled to participate in this effort, which we see as a critical step forward for the payments industry.
Chip technology has the potential to be a significant improvement over the outdated magnetic stripe, in terms of both security and convenience. Yet a number of hurdles have prevented its acceptance and allowed the U.S. to lag behind the rest of the world – leaving the door open for fraud such as skimming and data breaches to bleed millions of dollars from U.S. consumers, merchants and financial institutions every year and undermine consumer confidence in the payments system.
One of the biggest hurdles is the need for new infrastructure to support chip technology. Issuers and merchants alike are reluctant to invest in new systems before knowing that they are adopting interoperable standards that will move them forward. To help smooth the path toward fulfilling the promise of chip technology, the industry needs standards that will enable widespread issuance as well as adoption at the point of sale, all at the same time.
Industry Standards Should Address Unique Benefits and Features of PIN Debit Networks
To enable the entire process to move forward, the industry will need to coalesce around standards that consider the requirements of new regulations and the current competitive environment, as well as the infrastructure and security features of the PIN debit networks. These networks have a single-message, real-time infrastructure that results in unique benefits for industry players, including efficiency and good funds for merchants. They also have historically enjoyed the lowest rates of fraud because of the use of a PIN for cardholder authentication. We want to make sure whatever technology we adopt continues to offer these same benefits and the same attention to higher security – this is why the SRPc working group is so important.
These are all issues that the STAR Network has been leading the charge on for several years. They are the reasons we developed STAR® CertiFlash™ – introducing it nearly two years ago in response to our clients’ concerns about the inadequacy of their current options for advancing security and enabling continued consumer choice.
STAR CertiFlash was developed specifically with the U.S. payments industry in mind. It supports online authorization and verification, requires minimal effort or customization for financial institutions to support it, supports the requirement that cards enable at least two debit networks, and offers a unique set of security features.
With multiple security layers that include a transaction cryptogram that changes with every transaction and uses a unique key for each card as well as patent-pending dynamic, one-time card number technology that takes the card number completely out of the transaction, First Data and the STAR Network have brought to market a security innovation that takes advantage of the capabilities offered by the chip. We believe that STAR CertiFlash meets the need for an industry standard that accelerates the adoption of chip technology while heightening security and consumer confidence.
It is too early to tell what the outcome of the SRPc working group effort will be, but we look forward to the process and to the end result, which will be a smoother path toward fulfilling the promise of chip technology to reduce fraud and improve the payments experience for consumers.