While Target recovers from their shocking $40 million credit and debit card record theft from last year, Visa and MasterCard have joined forces to push for a new chip-enabled card that will improve security for all transactions. These two credit card brands have set a potential October 2015 deadline for all US retailers to adopt and setup the infrastructure for the new card system.
Before this initiative can go national, MasterCard and Visa will have to clear a few hurdles. The National Retail Federation- the world’s largest retail trade association- has not yet given its nod to the proposal. For now, those in agreement include banks, credit unions, retailers and industry trade associations all working on understanding and implementing the EMV chip technology.
What makes the new credit card special is that the card information is stored on the embedded computer chip rather than the magnetic strip. This makes it hard for a thief to steal data, and the depending upon who has issued the card, an additional personal identification number, or PIN can be used to make it more secure.
Since there are no immediate plans to enforce the PIN option, the National Retail Federation is hesitant to commit as yet. Folks in Europe and Asia are well versed with these PIN enabled cards as they have been using it for quite a while now. The usage is pretty simple, every time you make a purchase, you may be asked by the credit card machine to punch in your unique PIN number. Only if this number matches your details will the transaction be completed, otherwise it will be declined.
Organizations considering the proposal will be considering two major points. One is the cost of a $30 billion dollar infrastructure upgrade. The other is the “foolproof” nature of the technology – if the switch really does bring security worth the cost of the switchover. We suppose time will tell.