Continuing Data Breaches Spur Effort to Boost Card Security

Banks and retailers speed up drive to add chips to cards.

August 20, 2014

NEW YORK – According to an article in the Wall Street Journal, MasterCard is recruiting both consumers and business owners as part of research it’s conducting into the new credit cards coming to American wallets in an attempt to combat fraud.

The push for the new cards is taking on greater urgency following a number of high-profile data breaches in recent months that have exposed millions of consumers to potential fraud. Just last week, grocery chain Supervalu Inc. disclosed that it was investigating a breach that could affect shoppers at roughly 1,000 supermarkets.

Major lenders, regional banks and credit unions are rolling out the new cards, which contain a computer chip in addition to the traditional magnetic strip on the back. Merchants, too, are installing new terminals at the cash register to accept the cards.

According to the article, U.S. lenders will issue more than 575 million chip credit and debit cards by the end of 2015, representing roughly half of the one billion cards now in circulation.

While chip cards are widely used in other parts of the world, U.S. adoption has lagged — but not anymore. Now, the increasingly frequent security breaches are making both card issuers and merchants eager to roll them out.

In May, NACS Magazine’s cover story, “Half Covered,” tackled the current challenges around data security, claiming that “without chip and pin retailers remain vulnerable.”

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