PIN@POS to become mandatory: ACCC gives green light to Visa, Mastercard

By Aimee Chanthadavong

The Australian Competition and Consumer Commission has granted Visa, Mastercard, American Express and participating financial institutions to coordinate the removal of signatures as a method of authentication for most credit card transactions that are completed in person.

The ACCC said without this coordination, Visa and MasterCard would each independently implement mandatory PIN@POS, and American Express would also make similar arrangements, as the mandatory use of PINs is considered by credit card providers and financial institutions to be an important tool to combat fraud.

According to the ACCC, the public will benefit from the proposed coordination between the card schemes and financial institutions, and that the coordination is likely to lead to mandatory PIN@POS being implemented earlier by more card schemes

“A coordinated approach and a single message from industry is likely to lead to some efficiencies and less confusion for customers and merchants,” ACCC commissioner Jill Walker said.

“This coordination is unlikely to significantly reduce competition, as the card schemes will continue to compete on fees and all other aspects of their product and service offerings to financial institutions, merchants and cardholders.”

MasterCard has welcomed the announcement with country manager Andrew Cartwright saying it will provide better protection for retailers and cardholders alike.

“Use of a PIN saves time at the terminal, it’s also a wise choice to help safeguard against fraud due to lost or stolen cards, as the chances of someone correctly guessing your PIN, which can be from four to six digits long, is very small,” he said.

The coordinated approach takes lead from the U.K where they too also made the transition making PIN mandatory back in 2006.

The ACCC proposes to grant authorisation until 30 June 2015, to allow the applicants to delay the implementation beyond the current dates proposed if necessary.

The ACCC has also granted interim authorisation to allow the parties to reach agreements with American Express regarding its involvement in the coordinated implementation of mandatory PIN@POS and the associated public communications campaign.

The ACCC will also now seek submissions from interested parties in response to the draft determination, with final decision anticipated in December.