Frequent international business travelers may be accustomed to seeing a small silver or gold rectangle above the first four numbers of their corporate cards, while others have experienced the inconvenience of not having that mini-chip when using their cards at terminals or ATMs abroad. With chip-and-PIN technology on Oct. 1 set to become the standard in the United States, you already may have started noticing a lot more chip-enabled cards and terminals.
"The U.S. migration to EMV [EuroPay, MasterCard and Visa standard payment cards] overall is progressing very nicely," said MasterCard senior vice president of product delivery Carolyn Balfany. "There are about 1.2 billion cards in the market with U.S. consumers today and we think by the end of 2014, across all brands, there was something between 100 and 150 million cards already chip-enabled.
"More importantly, if we look toward the end of 2015, we believe that greater than half of all U.S.-issued cards and merchant terminals will be chip-enabled."
While MasterCard could not provide specific numbers for corporate cards, Balfany said MasterCard expects that it would be "similarly proportionate, so better than half of all [corporate] cards would be enabled."
EMV or chip-and-PIN embedded technology authenticates transactions that users can verify using personal identification numbers or signatures. This process has been shown to reduce credit card fraud better than traditional magnetic swipe cards in countries that began adopting the technology as early as 2001. Chip cards still can be used at terminals that are not chip-enabled.
The new standard will shift the liability to merchants who have not upgraded their terminals or to issuers who have not provided chip-enabled cards, both of which could have prevented fraud. Travelers and consumers typically are not liable in cases of fraud—depending on the case.
While the United States is one of the last countries to adopt the technology, some banks in 2011 began issuing chip cards in North America to frequent international travelers, that is, business travelers, who "in many ways were the first movers, as corporate travelers within a bank's portfolio have a high tendency for international travel," said MasterCard senior vice president of commercial products Jay Singer.
"Many of the banks and credit unions accelerated past this initial strategy in the latter part of 2014 to begin issuing cards either on a natural reissuance—when cards were naturally expiring—or when U.S. consumers requested them," Balfany said.
American Express has provided chip-and-PIN cards for more than 10 years in Australia, Canada, France, Germany, Spain and the United Kingdom. In the United States, chip and signature cards are available upon request for all consumer cards, small business and corporate cards, according to American Express spokesperson Melissa Banas.
"All of American Express' U.S. corporate card products are available with EMV chip and signature for our clients who request them and also are being provided upon renewal, replacement or as part of a new account setup," Banas told Business Travel News in an email. "In the U.S., there is still work that must be done and investments that must be made across many payment industry stakeholder groups, including issuers, acquirers and merchants, to ensure seamless chip-and-PIN usability at the point-of-sale."
Not all Visa chip cards will be authenticated with PINs and instead will require a signature, a Visa spokesperson said.
"Well over 50 percent" of U.S. BMO cards and all U.S. ATMs are now chip-certified, BMO vice president of North American corporate card products Steve Pedersen told BTN in an email. BMO last year announced it would begin issuing chip corporate cards upon renewal and as they need to be replaced. Similarly, Bank of America Merrill Lynch last year also announced it would replace corporate cards with chip cards at the time of renewal.
Organizations with managed travel programs also are hurrying to issue cards to their travelers. The U.S. General Services Administration announced that it would begin rolling out more than one million chip-and-PIN charge cards this month as part of its SmartPay charge card program, which includes purchase, travel, integrated and some fleet cards.