Walmart and Visa are going to war over your PIN. On Tuesday, the giant retailer filed a lawsuit against Visa, complaining the financial services company won’t let it require PINs on transactions made with chip-enabled debit cards. Instead, the credit card company wants customers to have the choice of using signatures, which Walmart says are less secure.
“PIN is the only truly secure form of cardholder verification in the marketplace today, and it offers superior security to our customers,” Walmart said in an emailed statement. “This suit is about protecting our customers’ bank accounts when they use their debit cards at Walmart.”
Visa didn’t immediately respond to a request for comment.
Walmart and Visa dispute comes as retailers and consumers adjust to new chip-enabled cards, which are inserted into newer readers but swiped at older ones. Not all retailers have made the transition to the new technology, creating confusion among customers.
Dimitri Sirota, CEO of security firm BigID, says the suit isn’t just about PIN vs. signature. Signature payments go through Visa’s system, whereas PIN authentication goes directly to a customer’s bank. Signature payments make Visa more money (about five cents a transaction), but more importantly, they tie merchants, banks and customers into Visa’s system.
That’s a big deal at a time when everyone is fighting for control of the payments system. Apple Pay made headlines when it came out because it reduces the need for Visa as a middleman (in addition to making transactions far more secure). Walmart has flesh in the game as well: It’s one of the driving forces behind CurrentC, an alternative to Apple Pay that takes money straight from customers’ bank accounts, no need for Visa.
Walmart is far from innocent either. Sure, the CurrentC system it’s developed cuts out Visa, but it’s a nightmare to use. To buy something, you’ll have to open an app and force some poor store clerk to scan a QR code.
Meanwhile, customers are getting screwed from left to right with way too many options. We’re in the middle of an incredibly painful transition to chips right now (seriously, have you stood behind a 70-year-old trying to work out a chip?), and it’s just the beginning. Chips, PINs, contactless, Apple Pay, Google Wallet, Samsung Pay, CurrentC, PayPal facial recognition, BitCoin — you need a dictionary and three devices to run errands these days.
On the face of it, this Walmart vs Visa lawsuit is a no-brainer: PINs are better than signatures and many believe Visa is being a selfish. But looking at the bigger picture, the issue isn’t nearly as clear-cut. There’s a battle raging for control of the multi-billion-dollar payments system, and a billion other consumers are stuck in the middle.