Worked in the payment industry for years. Visa/Mastercard do absolutely nothing to verify that companies are not storing Pin codes. The HSM is required for communication with them only.
HSMs are required so that the company does not need to have PIN codes exposed anywhere. Not having PINs or full credit card data makes your life easier as there is nothing to steal from you in the first place.
If your company stored PIN codes it means you were in breach of the contract and it had to lie to the auditors to pass the certification.
The pin we are talking about is what is customized on your credit card (directly in its memory) or its equivalent in your bank's HSM for the sole purpose of performing CVM step negotiated by yor card and payment terminal.
Legit companies don't want the info and anyone that wants the info isn't doing anything legal with it.
Devices that accept cards need to comply with PED/PTS security requirements including very strict physical security requirements which are validated by PCI council approved laboratories and firms.
You are not getting a device on the market or usable with any merchanet network without complying with this: https://www.pcisecuritystandards.org/documents/pos_ped_secur... and a few other standards.
The question is, how Chinese banks coax Visa into allowing them using them.
I think the GP is confused on how a POS works, POS isn't a POI most of them don't touch the credit card they just talk to the reader, most readers today are P2PE closed loop solutions so the only thing the POS does is sends to the reader charge the next card $X the reader will then reply if the transaction went through or not and that's it.
The reader itself will talk to the acquiring bank or the payment provider in a point to point encrypted closed loop and the merchant would never see any credit card details.
Sure you can send fake devices to be certified and sell something completely different but the same can be said for any certification and if you get caught boy or boy...