3 Min Read
REUTERS - Visa Inc (V.N) and MasterCard Inc (MA.N), the world's two largest payment networks, have formed a new cross-industry group to improve payment system security following a number of high-profile data breaches.
The new group, which will include banks, credit unions, retailers and industry trade groups, will initially focus on the adoption of the safer 'EMV' chip technology in the United States, MasterCard and Visa said on Friday.
EMV chip technology, already used in Europe and Asia, stores information on computer chips rather than on traditional magnetic strips. EMV stands for Europay, MasterCard and Visa, the companies that launched the technology.
The move follows several data breaches at U.S. retailers, including one at Target Corp (TGT.N) late last year involving the theft of about 40 million credit and debit card records.
"We remain insistent that U.S. retailers' customers be given the same protections as consumers in more than 80 countries who have both a chip and a PIN securing their credit and debit cards," National Retail Federation General Counsel Mallory Duncan said in a statement.
MasterCard and Visa had already set a deadline of October 2015 for U.S. retailers to adopt the new payment technology.
But banks and retailers have been dragging their feet over the required upgrade, at odds over who should bear the cost, which experts say could be as much as $10 billion.
Target said last month it was accelerating a $100 million program to implement the use of chip-enabled smart cards to protect against cyber threat, with a goal to have the technology in place by early 2015.
EMV cards are harder to counterfeit and better protect sensitive data through encryption.
They can also require users to enter a personal identification number, or PIN, to make purchases, adding an extra layer of security.
"The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security," Visa President Ryan McInerney said in the statement.
Reporting by Aman Shah and Siddharth Cavale in Bangalore; Editing by Kirti Pandey and Don Sebastian