Wal-Mart to support smartcard payments

Retail giant's reported move to chip-and-PIN transactions could finally nudge others into doing same in the U.S.

Retail giant Wal-Mart is reported to be planning on making all its payment terminals in the U.S. compliant with a smartcard-based credit card technology that is already widely used around the world, but not in the U.S.

Wal-Mart's plans were disclosed at a smartcard conference being held this week, and was first reported by StoreFront Backtalk earlier on Thursday.

StoreFront quoted Jamie Henry, Wal-Mart's director of payment services as saying the retailer was working on making all payment terminals in its domestic stores Chip and PIN capable. Henry was reported as having said that for Wal-Mart, signature-based credit-card transactions had become a "waste of time."

Such a move by Wal-Mart would have a widespread ripple-effect across the payment industry. As the largest retailer in the world, a Wal-Mart decision to support chip-and-PIN could finally nudge card issuers, processors and other merchants to start adopting the technology.

Until now, such organizations have been reluctant to move to chip-and-PIN systems because of the perceived costs associated with upgrading to the technology. Merchants must upgrade or replace all their existing terminals to accept the smartcard transactions. Banks, too, would need to issue new cards to customers.

Smarrtcards cards use an embedded microprocessor (the chip) rather than a magnetic stripe to store cardholder data. To use the cards, a cardholder usually has to enter a Personal Identification Number (PIN) when making a transaction.

Smartcards are thought to be significantly safer than magnetic stripe cards, even though security researchers have recently demonstrated how chip-and-PIN transactions can be broken. Most smartcards in use today are based on the Europay MasterCard Visa (EMV) smartcard standard from the major credit card companies.

Though most of Europe and several countries around the world have moved to the EMV technology a long time ago, the U.S has been a notable hold-out largely because of the cost concerns.

That's because until recently, the costs of moving to smartcards outweighed the fraud risks associated with signature-based technologies, said Ray Wizbowski, director of marketing strategy for Gemalto NV, an Amsterdam-based smartcard vendor with U.S. headquarters in Austin.

But that equation has begun to change quite quickly, Wizbowski said. With most major economies already standardized on EMV cards, credit card fraud has begun "migrating" to the U.S in a big way because magnetic-stripe cards present an easier target, he said.

The fact that U.S. cardholders are already finding it increasingly difficult to use their magnetic stripe cards outside the country could also become a big driver, Wizbowski said.

Wal-Mart's plans represent "very positive news for the industry and consumers as a whole," Wizbowski said. "It means consumers are going to have a secure payment product available to them," relatively quickly, he said.

Wal-Mart's move to adopt smartcard terminals will mean little if card-issuers and the major credit card companies don't move to the technology as well.

Earlier this week, the United Nations Federal Credit Union in Washington became the first financial institution in the country to announce plans to start issuing EMV-compliant credit cards to its customers.

Numerous other, bigger card issuers are also exploring similar roll-outs according to Wizbowski.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags smartcardWalMart

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jaikumar Vijayan

Computerworld (US)
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?