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Visa Gives Its Contactless Payment Card Program a Global Push
The credit-card company is promoting its global spec for RFID-enabled Visa credit and debit cards. It has also announced a U.K. rollout.
Dec 06, 2006—Though banks have issued roughly half as many Visa Contactless RFID-enabled credit and debit cards as they have MasterCard PayPass cards (5.5 million versus more than 10 million), Visa is pushing forward on its Visa Contactless program by building it up both in the United States and overseas.
In November, the company released a global contactless-payments specification, which is designed to enable Visa Contactless cardholders from all parts of the world to use their cards at any merchant that has deployed the spec in its RFID-enabled payment terminals. The global specification includes support for Visa Contactless EMV-based cards, which combine RFID technology—for transmitting payment data over RF with an RFID-enabled payment terminal—with EMV, a payment protocol used in Europe and Asia. The spec also supports non-EMV-based contactless cards currently being issued by banks in the United States. In addition, Visa Europe—Visa's European business unit—announced that it is working with issuing banks to roll out Visa Contactless EMV-based cards across the United Kingdom, starting in London, by the end of next year.
EMV is an acronym derived from the names of the three companies that developed it: EuroPay, MasterCard and Visa. It was developed to improve security and enable offline payment transactions. The EMV protocol heightens security by using encryption algorithms to authenticate the card's legitimacy.
EMV cards contain an embedded integrated circuit that stores encrypted information about the account and can process the authentication protocols with the payment terminal. EMV transactions can be done either in online mode, where the payment-processing terminal links with a payment-processing center, or offline, with authentication taking place only between the payment card and the payment terminal. The offline mode is used largely in remote areas by merchants lacking a means of linking their payment systems with payment processors in real time. The issuing bank sometimes requires a cardholder to key in a personal identification number (PIN) to provide a secondary means of identification. Visa Europe does not require the use of a PIN for purchases under 15 euros, though the bank that issues a given Visa EMV card may require one.
The release of Visa's global payment specification is significant, says Stephanie Ericksen, vice president of product and technology integration for Visa International, because once merchants worldwide deploy payment terminals that follow the new specification to communicate with RFID cards, consumers will find their RFID cards interoperable with card readers in EMV and non-EMV markets alike. Non-EMV-based contactless card readers, she explains, will read EMV-based contactless cards without requiring the EMV protocol for those transactions. And EMV-based contactless card readers will read contactless cards from non-EMV markets without requiring full EMV functionality—similarly to how the EMV-based terminals read non-EMV magnetic-stripe payment cards by reading the magnetic stripe on the back of the card only.
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