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