Menu
Pressure increases on banks to adopt chip-and-PIN

Pressure increases on banks to adopt chip-and-PIN

State attorneys general call for new technology in joint letter

The biggest financial institutions in the U.S. are under renewed pressure to mandate the use of PINs with new chip-based payment cards.

On Monday, the attorneys generals of nine U.S. states sent a joint letter to the companies, urging them to adopt the technology as a way to reduce the effectiveness of data breaches and card fraud.

Banks have issued millions of chip-based cards this year, bringing the U.S. belatedly in line with most of the rest of world, but while other countries switched to PINs as they introduced the cards, the U.S. has stuck with signatures as a second form of identification.

The new cards electronically transmit one-time codes instead of card numbers when customers pay. That eliminates the risk of data breaches from malware in store systems like those that hit millions of customers at Target and Home Depot, but it doesn't stop fraudulent in-store transactions from taking place.

"There can be no doubt that this is a less than secure standard, since signatures can be easily forged or copied or even ignored at the point-of-sale," the attorneys general wrote in their letter. "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."

The letter was addressed to the CEOs of Bank of America, JP Morgan Chase, Citigroup, Capital One, Visa, Mastercard, American Express and Discover, and came from the attorneys general of Connecticut, the District of Columbia, Illinois, Maine, Massachusetts, New York, Rhode Island, Vermont and Washington.

The attorneys general are often involved in cases involving data breaches, thus their desire to see financial card fraud reduced.

Behind the reluctance of card issuers to force the use of PINs is the competitive U.S. financial services market. No bank wants to be the first mover in case consumers think remembering a PIN is troublesome and switch to other cards in their wallet that still allow signatures.

Retailers, which have invested millions of dollars in new payment terminals to accept the cards, have been calling for the use of PINs for several months. On Monday, the Retail Industry Leaders Association applauded the letter, calling chip and PIN the "gold standard" for card security.

"There simply is no honest explanation for banks to refuse to provide Americans with the same credit card security offered in Canada and Europe," the group said.


Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Featured

Slideshows

Sizing up the NZ security spectrum - Where's the channel sweet spot?

Sizing up the NZ security spectrum - Where's the channel sweet spot?

From new extortion schemes, outside threats and rising cyber attacks, the art of securing the enterprise has seldom been so complex or challenging. With distance no longer a viable defence, Kiwi businesses are fighting to stay ahead of the security curve. In total, 28 per cent of local businesses faced a cyber attack last year, with the number in New Zealand set to rise in 2017. Yet amidst the sensationalism, media headlines and ongoing high profile breaches, confusion floods the channel, as partners seek strategic methods to combat rising sophistication from attackers. In sizing up the security spectrum, this Reseller News roundtable - in association with F5 Networks, Kaspersky Lab, Tech Data, Sophos and SonicWall - assessed where the channel sweet spot is within the New Zealand channel. Photos by Maria Stefina.

Sizing up the NZ security spectrum - Where's the channel sweet spot?
Kiwi channel comes together for another round of After Hours

Kiwi channel comes together for another round of After Hours

The channel came together for another round of After Hours, with a bumper crowd of distributors, vendors and partners descending on The Jefferson in Auckland. Photos by Maria Stefina.​

Kiwi channel comes together for another round of After Hours
Consegna comes to town with AWS cloud offerings launch in Auckland

Consegna comes to town with AWS cloud offerings launch in Auckland

Emerging start-up Consegna has officially launched its cloud offerings in the New Zealand market, through a kick-off event held at Seafarers Building in Auckland.​ Founded in June 2016, the Auckland-based business is backed by AWS and supported by a global team of cloud specialists, leveraging global managed services partnerships with Rackspace locally.

Consegna comes to town with AWS cloud offerings launch in Auckland
Show Comments