Why One Bank Chose Chip-And-PIN Over Signature

Many American consumers might already be cringing at giving away the convenience of swiping cards, but the new change might well be on its way to making things more difficult for consumers.

Much in line with the EMV liability shift, which kicked in yesterday (Oct. 1), First Niagara Financial Group Inc. announced that its rolling out chip-based credit and debit cards. However, its customers wouldn’t just be dipping their cards but also punching a four-digit PIN, instead of signing a receipt.

“It was not a quick decision,” said Justin Bigham, head of consumer product management at the Buffalo, NY-based bank.

While most American financial institutions try to move away from processes which add friction to the checkout process at retail stores, the bank decided to instead take the plunge and value the security chip-and-PIN offers over the convenience of dipping and signing, Bigham told The Wall Street Journal.

Though the bank is relatively small with just 250,000 credit cards in circulation and $300 million in outstanding loans, it makes for the largest bank which has decided to implement the chip-based cards with a personal identification number, according to WSJ.

The decision comes on the heels of the EMV liability shift that made merchants liable for any fraudulent card-present transactions if they haven’t already upgraded to an EMV-enabled point-of-sale terminal.

As much as the average American consumer might hate it, the move is being welcomed by retail associations across the U.S.

“If they are issuing credit cards with chips-and-PINs, then they deserve kudos from the retailers and consumers everywhere,” said Mallory Duncan, senior vice president and general counsel for the National Retail Federation, according to WSJ.

Even if First Niagara’s adoption of chip-and-PIN were to pick up, it would still be a while before it becomes commonplace.

As PYMNTS reported yesterday, it won’t be until the end of 2017 before the American market will see a full-scale adoption of EMV cards.

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