The giant company Wal-Mart has sued the payment company Visa Inc., due to chip-code debit cards verification.
According to a statement Wal-Mart issued to the Associated Press, Visa is not allowing the retail company to verify chip cards with Personal Identification Numbers (PIN).
Wal-Mart has stated that Visa prohibits the verification via PIN and it suggests a signature verification instead. The verification through a signature is a modality the retail giant company sees as unsafe.
Commonly, customers use a PIN verification when using a debit card in a purchase. However, VISA has implemented the option to verify the purchase with a simple signature of the customer. Wal-Mart believes this measure might be insecure.
“This suit is about protecting our customers bank accounts when they use their debit cards at Wal-Mart,” said the company in a statement to the Associated Press.
Debit cards are the most common type of payment registered at the Bentonville, Arkansas based retailer company. Around 70 percent of the purchases made at Wal-Mart are made with debit cards.
According to Wal-Mart, Visa obtains more money when checking a signature transaction that when using a personal identification number.
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Five cents more are gained by Visa when checking a signature purchase than when using a PIN check, stated the Wall Street Journal. Last year, Wal-Mart implemented the PIN verification in their stores, yet the retailer had to stop this measurement in a request from VISA.
“Visa has demanded that we allow fraud-prone signature verification for debit transactions in our U.S. stores because Visa stands to make more money processing,” said Wal-Mart.
The lawsuit comes as a response to various debates on security and convenience while making purchase transactions with debit and credit cards. Many believe chip cards will avoid fraud even more, while using PIN numbers to double-check the transactions.
Wal-Mart’s lawsuit has been filed at the New York State court and it is not the first between these two companies that have been in disputes for different issues over the years. Visa has yet to make any comment on the matter.
Source: Wall Street Journal