Card companies MasterCard and Visa are renewing their push in the US to speed up EMV (AKA pin-and-chip) enabled card adoption.
The push to convert the archaic magnetic strip cards is the result of numerous data breaches that US companies have endured over this past year, such as Target, Neiman Marcus, and most recently Ecommerce marketplace eBay.
The shift to the EMV standard would help in reducing fraud targeted towards the US as a result of the less secure payment methods available now. The US will join Canada, Mexico and most of Western Europe who have already adopted the chip-and-pin standard.
According to MasterCard’s group head for U.S. product delivery Carolyn Balfany, the shift won’t eliminate card fraud but will put a considerable dent in it due to the difficult nature of replicating EMV cards.
“Typically, fraudsters are going to go to the path of least resistance,” Balfany stated.
Costs and disputes over ways of operation are what halted the transfer to EMV in US. Retailers have somewhat hesitated to make the shift due to the costly procedure of changing out all current card terminals to one that fit the EMV standard. Retailers, card issuers, and processors have also clashed on the matter as to who will gain initial access to a new payment system. The technical decisions that need to be made have a direct influence over how much retailers and customers have to pay, and how much card issuers make on each swipe.
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
As a result of the recent Target data breach, most issues have been resolved between participating parties in an attempt to prevent a similar incident from happening again in the future.
Target is already accelerating plans to convert all card terminals to EMV compliant ones. The retailer is will spend an approximate $100 million to install the technology in all of its 1,800 US stores. To ease the transition for Target shoppers, the retailer has partnered with MasterCard to issue Target branded cards equipped with EMV technology.
While chip-and-pin supporters boast the security benefits as an in-store solution, opponents to the new standard fear it will cause a rise in online fraud. As EMV is not affective online, requiring card numbers to be provided by cardholders, fraudsters are most likely going to concentrate their efforts to Ecommerce based databases.
“Chip and pin is just another security component. What matters is how companies like Target use consumer information, how they protect it,” Ken Stasiak, founder and CEO of SecureState stated.