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Target Breach Sparks Outcry for Chip and PIN Cards

The massive data breach of Target has triggered a call for US financial institutions to adopt an established anti-fraud technology used throughout the rest of the world. A broad coalition including consumers and media outlets wants outdated magnetic strip cards to be replaced with more secure chip-and-PIN card system which is used in 80 nations. When the cards are used, rather than swiping the card, a consumer inserts the card into a terminal and either enters a PIN or signs their name. In Europe, 94 percent of sales terminals use the chip system, while the technology is used at 77 percent of sales terminals in Canada and Latin America. Only 10 percent of US sales terminals have the technology. One report says Visa is pushing the technology, but would still only have a 60 percent adoption in the US by October 2015. “The US is one of the last markets to convert from the magnetic stripe," Randy Vanderhoof, director of the EMV Migration Forum told The Los Angeles Times. EMV stands for Europay, MasterCard and Visa and the name for the chip technology standard. “There's fewer places in the world where that stolen data could be used. So the US becomes more of a high-value target.” A prime force behind adoption, according to The Sacramento Bee, is legislation, which is lacking in the US. The European Payments Council, for example, required banks in 38 countries to adopt the technology by January 2011, while governments in Japan, Korea, Taiwan, Australia, and South Africa also drove adoption. Replacing cards and readers in the US is estimated at roughly $8 billion; however the annual cost of credit card fraud is $8.6 billion. (Reuters -- 1)(Reuters -- 2)(NBC News)(The Sacramento Bee)(The Los Angeles Times)(National Public Radio)
 

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