HARTFORD, Ct. – Nine state attorneys general from Connecticut, Illinois, Maine, Massachusetts, New York, Rhode Island, Vermont, Washington and the District of Columbia are urging the largest credit card issuers to move to full chip and PIN technology as soon as possible. The attorneys general said that doing so would be in the best interest of consumers, who are now routinely impacted by breaches involving credit and debit cards, and of local businesses, which are at risk of increased financial risks as well as harm to their reputations and loss of consumer trust if they experience a breach.

"Over the last few years, breaches at major retailers that involved credit and debit card information have really shown a giant spotlight at the inherent weakness and vulnerability of magnetic strip cards even when the cards are lost or stolen," Connecticut Attorney General George Jepsen said. "We know, based on experiences in other countries, that chip and PIN cards offer greater security to consumers—security that I believe far outweighs any initial burden or confusion that always comes when we need to get used to a new way of doing things, like using a credit card.”

The attorneys general said that while the ongoing implementation of chip-enabled cards in the United States is "imperative in order to provide stronger payment security and assurance to consumers," most chip cards currently being issued in the country rely on a signature, rather than a PIN, as the secondary form of verification.

"There can be no doubt that this is a less secure standard, since signatures can easily be forged or copied or even ignored at the point of sale," the attorneys general wrote. "In order to better protect consumers, the chip-enabled cards issued in this country must be reinforced with the requirement that consumers enter a PIN to verify the transaction….absent this additional protection, your customers and our citizens will be more vulnerable to damaging data breaches. This is something we cannot accept, and nor should you."

By the end of 2015, there were 1.62 billion chip cards in use across 80 countries around the world. France, Canada and the United Kingdom, among others, reported significant reductions in various types of payment card fraud since the adoption of chip and PIN technology. Since 2003, the United States has consistently accounted for about half of the global loss from fraudulent transactions, despite being responsible for only a quarter of total card payments, according to the state AGs.

Meanwhile, the New York Times wrote that the new EMV chip cards are at the center of a growing dispute “that has pitted two of America’s most prominent industries—banking and retailing—against each other, and pulled in attorneys general and even the Federal Bureau of Investigation in the process.”

While the banks maintain that chip and a signature is enough security, they also continue to say retailers calling for chip and PIN as the more adequate security measure are trying to “deflect attention from the real threat to consumers: weaknesses in retailers’ security systems that have allowed hackers to steal credit card data in a series of breaches,” according to the Times.

“We think the focus should be for retailers to turn on their chip readers and use the technology that’s available to them,” James Chessen, executive vice president and chief economist at the American Bankers Association, told the news source.

NACS Board Member Jared Scheeler, who testified in front of the House Small Business Committee last month, commented, “It does not appear that the card companies took into consideration the realities of operating a small business when they came up with their transition plans.”

Scheeler told the committee that it has cost his chain of four North Dakota convenience stores $134,500 to date to install point-of-sale and pump card readers that accept EMV chip transactions. The average transition cost is more than $26,000 per store, compared with an average profit of $47,000 per year, bringing the total cost to roughly $3.9 billion for the 152,000-plus convenience stores nationwide. But because of exorbitant swipe fees and other liabilities, Scheeler said that merchants will end up bearing “far more than 100 percent of the cost of fraud,” notes the news source.