Citi Commercial Cards
this month plans to start issuing chip-and-pin smart cards to U.S. corporate
cardholders who travel abroad. Embedded with a microchip as well as magnetic
stripe, the new cards will be issued to Citi client companies that request them
for specific cardholders, said Deirdre Ives, director of wholesale cards in North
America for Citi Global Transaction Services.
"Where we see a
need from our client base and where we're responding to it are for those
travelers who are doing a lot of heavy international travel, where chip-and-pin
technology is most prevalent, and where travelers can run into problems in
usage of the card," Ives said. "Those are the individuals we're looking
to upgrade and reissue cards."
Since Mexico and Canada in recent months joined Europe, Asia and most of the world in migrating to
credit card security that relies on a microchip and four-digit personal
identification number to authorize transactions—instead of a magnetic stripe
and signature—buyers and U.S. cardholders have complained that they've been unable to use their cards in kiosks or other points-of-sale.
BMO Financial Group
this year announced chip card rollouts for small and mid-size accounts, Diners
Club portfolio clients and its large corporate base. U.S. Bank Corporate
Payment Systems is expected this month to announce its rollout plans.
Citi officials plan to
work with clients "on the best way to roll this out and identify
cardholders" who might need the upgraded card, Ives said. Citi said there
is no additional cost to clients for the chip-based cards, to be introduced on
both the MasterCard and Visa networks.
Some clients may have
just one or two cardholders who need the smart cards, while others will require
many more. "It depends on the travel mix of companies," Ives said.
"Given that our footprint really is with multinational corporations, we
can see where there's going to be a need for those traveling overseas."
Instead of a wholesale
migration, "much of this is going to be driven by our clients," said
Dave Ruda, director of commercial cards market management in North America for
Citi Global Transaction Services. "Some are eager to get the EMV cards. With
others, it may not be as important now." EMV is a standard set by EMVCo, a
company formed in February 1999 by Europay International, MasterCard
International and Visa International to manage, maintain and enhance chip
standards. American Express, JCB, MasterCard and Visa now own EMVCo.
"For clients who
have asked and are eager to get this by the end of the year, we should be able
to meet their needs," Ruda added. The rollout is expected to be gradual
and will "pick up more steam in the fourth quarter."
Ives said Citi has
tried to ensure the change is "not disruptive to clients. We're actually
rolling out new cards with the same card number, same reports. The only thing
that will be changing is the technology sitting on the card."
That was important,
Ruda said, as clients want "seamless integration into their back-end
travel expense reporting and ERP systems," all of which remain unaffected
as long as card numbers do not change.
In addition to being
able to use the chip-based cards in countries where they are becoming the
norm—at train station kiosks, convenience stores and other establishments–Citi
said the new cards also offer enhanced security "by validating both the
card and cardholder."
EMVCo said there were more than 1.24 billion EMV
compliant chip-based payment cards in use worldwide at the end of 2010.
Citi's Ruda said issuance of the chip-based cards
to U.S. cardholders has long been part of the company's roadmap. But the switch
to chip-based cards in Canada this year "helped facilitate how quickly we
could roll this out in the United States," Ives added.
Citi developed a
"suite of materials to train program administrators and individuals,"
Ives said. "One of the things that's kind of interesting about this is
that the education is already there because folks already traveling overseas
have experience on what chip-and-pin looks like."