PIN updated to new European standards

 

The Dutch payment product PIN already complies with new European payment system standards. With effect from 2010, all European bank card products have to comply with the SEPA Cards Framework (SCF), the regulatory framework of the European Payments Council (EPC), which is an alliance of the European banking industry.

 

Anyone with a European bank card will be able to make payments in any Euroland country just as safely and easily as they do at home. Through the EPC, the banks have agreed that they will issue nor acquire any card brands not complying with the new standards from 2010 onwards. Updating PIN to comply with the new rules means that the product can continue to be used in the Dutch market beyond 2010.

PIN future-proofed
The fact that PIN has now been made SCF-compliant opens the way for individual banks to continue offering their customers PIN cards beyond 2010 if they so wish. Currence expects a limited number of international debit card products to become commonplace in Europe over time, and therefore also in the Netherlands.

However, until such time that banks cancel their PIN licences and replace them with licences for pan-European payment products, PIN will continue to exist. Whether banks continue to opt for PIN will depend on the strategic priorities of these individual banks. For payments in the rest of Europe, it will be possible for bank cards to carry an international brand in addition to PIN (co-branding), just as is commonly done today. Consumers are currently already able to use the Maestro functionality on their bank cards to pay for purchases in many establishments in countries outside the Netherlands.

What will change for PIN Licensees and Certificate Holders?
Banks that issue or acquire PIN are Licensees; Certificate Holders includes institutions like terminal suppliers, data communication providers and transaction processors. The PIN Rules & Regulations have been amended to comply with the SEPA Cards Framework. This means that EMV technology (chip-based instead of magnetic-stripe-based) will be introduced for PIN.

 

What will change for cardholders and merchants?

  • PIN R&R have been amended where necessary to make PIN SCF-compliant as of 1-1-2008;
  • At the beginning of 2009, a decision will be taken as to whether PIN will enter a phase-out period in 20111. The current view is that this is what will happen if, in 2009, it is expected that international brands will be accepted by at least 70% of the then current POS terminal base by 2011, with PIN becoming obsolete by the end of 2013;
  • If it is decided at the beginning of 2009 that PIN will enter a phase-out period in 2011, PIN will not migrate to EMV. PIN will then cease to exist as a product at the end of 2013, when the last magnetic stripe POS terminals are taken out of service;
  • If it is decided at the beginning of 2009 that PIN will not enter a phase-out period, at least not in 2011, and will therefore not be obsolete by the end of 2013, licensee banks and all other stakeholders will make preparations to have PIN-EMV operational by the beginning of 2011. For those banks continuing to issue cards bearing the PIN brand beyond 2010, this means that they will have to start issuing EMV/chip & PIN* cards from 2009 onwards in order to be able to satisfy all of the EMV requirements in time. Systems must be ready for processing EMV authorisation requests by the beginning of 2011 so that authorisation of  EMV/chip & PIN transactions can commence as from this date. This also requires banks to have issued a substantial number of EMV/chip & PIN cards as early as 2011. Complete rollout of EMV/chip & PIN across the entire licensee card base will have to have been completed by the end of 2013 at the latest. The Currence rules will be amended to include this issuing of EMV/chip & PIN cards as a precondition for obtainging a PIN License (Issuing Bank);
  • Between now and the beginning of 2009, banks will be free to issue cards with or without EMV/chip & PIN capability;
  • In lin with SCF arrangements, PIN transactions fron 2011 onwards will, wherever possible, be conducted on the basis of EMV, except for transactions using legacy POS terminals (BeaNet terminals) still equipped with a valid security certificate. With the gradual expiry of security certificates for various existing types of POS terminal, by 2011, at least 70% of the terminal base will be capable of handling EMV transactions;
  • When EMV is activated for PIN, all EMV POS terminals accepting PIN will need to have the chip & PIN application installed, and each Acquiring Processor will have to be capable of processing chip & PIN transactions.

 

* The technology whereby the PIN code is stored on the card chip (instead of on the magnetic stripe) is referred to as 'Chip & PIN' (Dutch: PuC (PIN uit Chip)).

 

What will change for cardholders and merchants?
The introduction of EMV means that merchants will have to upgrade their POS terminals or replace them. The terms and conditions for accepting PIN payments will also have to be amended to comply with the new Europe-wide liability rules. Over the next few years, cardholders will receive a new bank card from the bank, embodying an EMV chip.

Paying with your PIN card: swift, safe and simple.

Click here to go to www.pin.nl.