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Visa Kicks Off U.S. Chip Card Education for Consumers and Merchants

Visa study finds more than half of consumers and two-thirds of merchants are aware of chip technology; one-third of consumers who are aware of chip’s security benefits cite preference for shopping at chip merchants; four-in-five merchants say chip readers would benefit their businesses

FOSTER CITY, Calif.--(BUSINESS WIRE)--Oct. 17, 2014-- Visa Inc. (NYSE: V), a global leader in payments, is kicking off a national awareness and education effort that will reach millions of U.S. cardholders and merchants with information about chip technology designed to make electronic payments more secure. The campaign, delivered through partnerships with financial institutions and merchants, will support the next stage of chip adoption in the U.S. by ensuring consumers and merchants have the information they need to use and accept chip cards.

In a recent study conducted by Visa, 52 percent of consumers and 84 percent of small- and medium-sized merchants said they were aware of chip technology and believe it will further enhance the security of their payments. Among consumers, three in five said chip cards are an improvement over magnetic stripe cards and one-third indicated a preference to shop at stores that are equipped with chip technology. Among merchants, 71 percent believe accepting chip technology would benefit their businesses and 39 percent of merchants believe their current card reader is already chip-enabled.

“The adoption of chip technology has the potential to virtually eliminate counterfeit fraud when widely adopted, and will help consumers feel more confident about using their payment cards,” said Ellen Richey, chief enterprise risk officer, Visa Inc. “Moving quickly to adopt technologies like chip cards, and digital account numbers or “tokens” in place of payment account data, will further protect personal account information by putting it in a form that if stolen, can’t be used by criminals.”

Chip is a card-security technology that’s expected to be activated in more than half of U.S. payment cards and large U.S. retailers by the end of next year.1 Whether using a plastic card, mobile phone, tablet or wearable to make a purchase – embedding a chip within the device adds a dynamic, digital code necessary for any transaction to be approved. Chip technology cannot be replicated in counterfeit cards, making the adoption of this technology a critical element in reducing fraud.

Visa’s national campaign entails working with partners in the private and public sectors to educate merchants, policymakers, civic leaders and consumers about Visa chip technology. Through visual and creative content that includes animated demonstrations and videos, the campaign will teach consumers and merchants about the benefits of chip technology and how to use chip cards.

Visa’s efforts will include:

  • Educating cardholders when new chip cards are mailed. Visa is providing its more than 10,000 U.S. financial institutions with customizable marketing materials including card mailers, online associate training, deployment toolkits, how-to video and information graphics;
  • Educating cardholders at the point of sale (POS) with customizable marketing materials and signage for small- and medium-sized businesses. Visa will also work with many of the largest U.S. merchants to develop additional POS educational opportunities;
  • Offering educational resources online with information on the benefits of chip cards and how to use them. Visa’s new microsite, Visachip.com, will feature educational video vignettes and how-to-use demos to help communicate various aspects of this new technology. The company will also support financial institution consumer education activities by promoting digital content through targeted search and display media;
  • Working with local chambers of commerce to invite industry-leading experts to participate in educational town hall sessions that include hands-on technology demonstrations in more than 20 markets across the country. Visa will work also with merchant trade groups to educate small- and medium-sized businesses about chip technology;
  • Partnering with leading organizations like the Center for Democracy and Technology and Bloomberg Government to educate policy and business leaders on this important technology migration.

“We are fortunate in that we can benefit from the experience of other countries that have adopted chip technology. What they have shared with us is that the more education we provide, the more expedient and seamless the transition,” stressed Richey.

Consumer Research Highlights

Visa’s research highlighted consumer desire for further chip education. The study found that although 52 percent of consumers are aware of chip cards, many indicated a desire to learn more about how to use the cards (70 percent). Other consumer data points include:

  • More than half of consumers who are aware of chip cards cite security as a key benefit;
  • Among cardholders who know that “chip technology” is a security enhancement, 73 percent said chip cards are an improvement over magnetic stripe cards;
  • A third of cardholders who are aware of the security benefits of chip said they would be more willing to shop at a store that was equipped to accept chip cards, and 55 percent feel their personal and financial information is more secure when shopping at a chip-accepting store;
  • Thirty-three percent of cardholders say they have enough information to use a chip card at chip-accepting stores if provided one today from their bank or issuer.

Merchant Research Highlights

More than 77 percent of small- and medium-sized merchant respondents said they are aware of chip technology and that the transition to chip cards will benefit their customers, and the majority said that having more information would help them feel more confident in making the switch. Other merchant data points include:

  • 71 percent of merchants said they are aware of chip technology and believe it will benefit their business;
  • 39 percent of merchants believe their current card terminal is chip-enabled;
  • 45 percent of merchants were aware of the October 2015 counterfeit fraud liability shift;
  • 66 percent of merchants reported either already having chip-enabled card readers or upgrading to chip readers by October 2015;
  • When it comes to having sufficient information to feel confident in making the switch to chip card readers, 45 percent of merchants not yet chip-enabled feel they have enough information; 55 percent said they would like more.

Chip is but one of several smart technologies Visa is leading the industry to adopt that will further strengthen the security of payments. In September, Visa announced a new service that will secure consumer payments on new Apple devices and other mobile technologies. By replacing sensitive payment account information found on plastic cards with a digital account number, consumers can make eCommerce or mobile payments without exposing personal account information, such as the 16-digit card number and other credentials, to the merchant. This is in addition to other core security technologies provided by Visa such as predictive fraud analytics. Visa’s fraud analytics protect in-store, mobile and online payments through a powerful processing system that analyzes more than 500 data points, in real-time, to predict, detect and stop fraud. And should fraud occur, cardholders are protected with Visa Zero Liability, which means they won't be held responsible for unauthorized purchases. Visa also helps victims of identity theft by offering access to counseling that will help guide them through the process of regaining their identity. This free service is available by calling 1-866-ID-HOTLINE.

Editor’s Note about Research Methodology: Visa commissioned a telephone survey of 1,000 major credit or debit cardholders nationally in the U.S. September 18-21, 2014. The sample was Random Digit Dial among 652 landline telephone numbers and 348 cell phone numbers. The sample was weighted by age, race, ethnicity and education level to the known demographic profile of major U.S. cardholders. The margin of error is ±3.1 percent at the 95 percent confidence level. The survey of merchants was conducted online using an opt-in B2B research panel. The national sample of 425 merchants (n=211 small merchants, n=214 medium merchants) was collected September 18-26, 2014. A small merchant was a business with annual revenues of between $100,000 and $999,999 per year. Medium merchants had annual revenues of $1,000,000 up to $24,999,999. Respondents were business owners or managers who solely had or shared responsibility for making the decisions about the forms of payments accepted and the purchase of payment equipment and services. All merchants polled accept payment cards, and a minimum of 40 percent of sales come from in-store purchases on either credit or debit cards. The sum of the results for each question may fall short of or exceed 100 percent due to rounding.

About Visa Inc.: Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks — VisaNet — that is capable of handling more than 56,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit usa.visa.com/about-visa, visacorporate.tumblr.com and @VisaNews.

1 Payment Security Taskforce projected more than 575 million credit and debit cards would be chip-enabled by the end of 2015. Javelin Strategy and Research forecast that 60% of the U.S. retailers employing 2,500 or more employees will be EMV-ready by the 2015 deadline, representing 27% of U.S. retail establishments.

Source: Visa Inc.

Visa Inc.
Sandra Chu, +1 415-805-4124
sanchu@visa.com
or
Jake Standish, +1 415-770-3027
jstandis@visa.com
or
Jennifer Morris, + 1 202-760-0145
jemorris@visa.com