Despite the possible security benefits, there is likely to be pushback for contactless payments from even more retailers, [Avivah Litan] said. That is, unless Visa and the other card brands make this method of payment more economically attractive to retailers by lowering their interchange fees.
Update 2 MINUTES ON... System Experts, contactless payments are not necessarily more secure than traditional Visa’s contactless controversy payment methods. “There are still security problems associ- ated with contactless cards. A fter months of talks Signature-based authenti- Contactless transactions “People have shown during with Visa, Best Buy cation is subject to a higher are more secure than tradi- testing that they can extract has stopped accepting interchange rate – the fee that tional, magnetic stripe debit primary account numbers out Visa’s contactless debit card. merchants must pay acquir- card transactions, Litan said. of these devices.” Best Buy’s move has ing banks for card services. This process uses a dynamic Despite the possible secu- security implications and Card brands encourage authentication code that rity beneﬁts, there is likely to highlights an age-old ﬁght consumers to use signature changes each time the con- be pushback for contactless between merchants and rather than PIN-based debit, tactless card is used based payments from even more card brands, said Avivah even though PIN is more on a unique algorithm. “The retailers, Litan said. That is, Litan, VP and distinguished secure than signature-based code presumably can’t be unless Visa and the other card analyst at Gartner. The con- authentication, Litan said. replicated properly if some- brands make this method of sumer electronics retail giant “Retailers want PIN-debit one steals the information on payment more economically made the decision because because of lower fees and the contactless card.” attractive to retailers by low- Visa is forcing merchants to higher security, and the card However, according to ering their interchange fees. use pricey signature-based companies want signature- Richard Mackey, VP of net- In the long run, card compa- authentication with contact- debit because of higher fees.” work security consultancy nies will have to ﬁnd a more less transactions, as opposed secure payment method that to PIN authorization, which U.S. retailers will be willing is cheaper for retailers. “Vi
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