Visa announces PCI compliance program -- but not for U.S.

Visa announces PCI compliance program -- but not for U.S.

In order to protect data in both contact and contact-less credit and debit card payments, Visa has initiated a compliance program that will be available internationally but not within the United States. The Payment Card Industry Data Security Standard (PCI DSS) program, called the Technology Innovation Program, will enable all eligible merchants outside the U.S. to join as of March 31, 2011.

Essentially, Visa is looking to reward merchants who use chip-enabled POS systems and who invest in improvements that help keep data secure during credit card processing. Until recently, Visa required merchants to validate their PCI DSS compliance every year, provided at least 75 percent of that merchant's business was conducted via chip-enabled terminals.

This is obviously an additional cost for merchants, and Visa hopes to eliminate it through the Technology Innovation program. It creates an incentive for merchants to invest in future technology and to take data protection seriously regardless of the types of transactions they initiate.

Now, under the new program, merchants will no longer have to take that step every year as long as they offer either contact or dual contact/contactless terminals for transactions. Visa is attempting to encourage the use of EMV chips as well as dynamic data authentication in general. It is believed that these changes to payment infrastructure will increase data security all around, making it safer for merchants as well as their customers.

As mentioned above, Visa is opening this program to all eligible merchants based outside the U.S., but merchants inside the US will not be eligible. Visa feels that U.S. financial institutions will be struggling in the coming years with new government regulations on routing and exclusivity, making it untenable to expect major changes and investments in new infrastructure.

It is possible that the Technology Innovation Program will spread to the United States farther down the road, but there are no plans for that in the immediate future. Financial institutions are expecting dramatic losses in revenue due to government regulation, so the marketplace remains uncertain.

There are a number of ways in which POS systems protect data during transactions. The use of PINs and signature requirements, for example, help combat fraud, and Visa considers these tactics useful particularly for "low-value, low-risk transactions." However, they hope to continue encouraging merchants to adopt dynamic data authentication methods as merchants make investments in new equipment.

The end result, of course, is safer transactions for all parties involved. Visa hopes that the Technology Innovation Program will help prevent both large- and small-scale fraud as more merchants adopt these standards.

Article by Steve Thompson

Published: March 8,2023