The news of course, in the wake of the most infamous consumer data breach yet, just gets newsier. Some reports indicate that information going back as far as ten years, on Target customers, could have been pilfered in the breach. One couple near the U.S. / Mexican border was arrested after having a cache of false credit cards in their possession, made from what appears to be a fraction of the stolen data.
Meanwhile, according to a recent article in USA Today, “retailers want banks to issue ‘smart’ credit cards to fight fraud,” as the headline had it. According to the report, “Matthew Shay, president and CEO of the National Retail Federation (NRF), has sent a letter to the leaders of Congress, calling on the banking industry to switch from the easy-to-hack magnetic stripe to the more secure PIN and Chip.”
These would be the “EMV” cards we’ve written about here before — already used abroad, and theoretically more secure, with their chip technology, than the stripe cards that are still standard here.
“‘As long as bank cards continue to be issued with outdated and fraud-prone magnetic stripe (and signature) security.” Shay continued in the article “‘ it is clear American card holders will remain largely unprotected.’”
The irony, though, comes from a Wall Street Journal report in the same news cycle: “Target Tried Antitheft Cards” the large headline reads, while the sub-header continues that “Years Ago Retailer Halted Rollout of Chip-Based Payment System.”
Uh oh! The article notes that “the U.S. has become the preferred target for criminal hackers,” due to not having the more secure system. Apparently, ten years ago, Target tried to steer the industry in the direction of chip-over-stripe, however, collaborating with Visa to bring the chip technology to its over 1,000 stores.
The chain’s “credit-card division tried to keep the program but lost out to the concerns of executives responsible for store operations and merchandising…who worried the technology slowed checkout speeds and didn’t offer enough marketing benefits.”
One wonders what the marketing benefits will be now, in the wake of the breach?
The article notes consensus could be coming, and quotes JP Morgan Chase CEO James Dimon, who says “”All of us have a common interest in being protected, so this might be a chance for retailers and banks to for once work together, as opposed to sue each other like we’ve been doing the last decade.”
Target, meanwhile, claimed there were a voice in the wilderness, having tried for three years to get the program going, with no one else in the industry following along.
The lengthy article does note, however, that “payment and security experts say the technology wouldn’t have prevented the attack at Target, but it would have made it more difficult for thieves to counterfeit the cards and make fraudulent purchases.”
Meanwhile, change is coming one way or another: “The technology is expected to get more traction in the U.S. by October 2015,” barely a year and a half away, the article continues, “when credit-card companies plan to hold merchants financially responsible for any fraud that stems from a transaction in which a chip-enabled card was presented but couldn’t be used. Currently, the banks that issue the plastic are liable for such fraud.”
Let us answer your questions about the changes that are coming, and the changes you can make now — from expanded payment options for your customers, to more security for you, and them.
Contact your AVPS rep today, and get a head start on tomorrow.