Visa International is pumping in US$25 million and putting in place new policies to make smart cards pervasive in the Asia-Pacific region. It aims to do this by accelerating the migration from magnetic stripe payment cards which are currently in use to EMV-standard (Europay-Mastercard-Visa) smart cards.
Regionally, Visa and its members will concentrate their initial investment and efforts in countries that have already started work on smart cards or expressed concerns about escalating fraud levels.
Under the scheme, the investment has been allocated to support a range of regional initiatives that will benefit Visa card-issuing banks, acquiring banks, retailers, technology providers and consumers.
These initiatives include training programs for banks, vendors and industry partners, the enhancement of EMV testing facilities and services and the support for vendors to increase their range of EMV products and services. EMV is a joint industry working group created to facilitate the introduction of chip technology into the international payment systems environment. It serves as the global framework for chip cards and device manufacturers and is designed to allow interoperability around the world.
The funds will be available over a seven-year period beginning next year.
At the country level, a framework has been agreed upon and established to address local initiatives such as domestic policies and funding based on market readiness, fraud rates and other parameters. In this instance, Visa will play the primary role in coordinating activities with its members to achieve domestic chip migration.
According to Rajiv Kapoor, executive vice president and general manager, marketing and product sales, Visa International Asia-Pacific, the move to chip will have considerable savings in fraud related losses. "A number of our major countries, such as Japan, Taiwan and Korea have already embarked on this accelerated migration and we expect other countries to follow suit rapidly as the benefits are magnified," he said. "Smart cards are the safest, most reliable way to combat the escalating counterfeit fraud in the marketplace today. They are also the most versatile payment tool available because banks can combine different applications on a single chip to tailor and market their cards to a consumer," Kapoor added.
To this end, Visa has already mandated that all new debit and credit cards utilizing chips must be EMV-compliant and that all existing chip programs must become compliant by January 2004.
Visa members, said Kapoor, have expressed their support to help drive this changeover in individual countries.
He added, "This broad ranging consensus from our members on the proposed smart card migration is testament to the importance of implementing payments using chip technology."