NEW YORK – CNBC reports that Sam's Club, a division of Walmart, “is just weeks away from becoming the first national retailer to offer its customers a chip-enabled credit card.”
Starting June 23, the Sam’s Club 5-3-1 cash back program on its new co-branded MasterCard, issued by GE Capital Retail Bank, is available to qualifying Sam’s Savings, Sam’s Business and Sam’s Plus members in the U.S. and Puerto Rico. The new card gives members the opportunity to earn 5% cash back on fuel, 3% cash back on dining and travel and 1% cash back on all other purchases, up to $5,000 annually.
“This move by Sam’s Club makes them a trailblazer in getting chip cards in the hands of businesses and consumers, and leading the push toward a safer and more secure customer experience. This will no doubt help drive chip-enabled technology forward here in the U.S. as it gains more traction,” said Chris McWilton, president North America, MasterCard, in a press release.
Security experts say that chip cards are “extremely hard to counterfeit,” but they do not stop credit card fraud.
“If a thief gets your account number — by hacking or skimming or some other means — it can still be used to commit online fraud because the card does not need to be presented,” writes CNBC, adding that the first chip-enabled cards issued in the United States also have a magnetic strip on the back because merchants are not required to install smart-card readers.
"Chip-enabled cards must be part of an entire security ecosystem that all businesses must institute," Adam Levin, chairman and co-founder of IDentity Theft 911, told CNBC, adding that although chip is a good first step, it is “not a silver bullet."
Currently, the credit card industry does not plan to require or enable PINs (personal identification number) on every transaction or card. NACS and Conexxus (formerly PCATS) believe that although chip-only technology (such as EMV, developed by Europay, Visa and MasterCard) prevents card replication, use of a PIN or other authentication method — along with the chip — would be even more secure.
Read more on data security in the May NACS Magazine cover story “Half Covered.”