MasterCard and Visa have recently announced the formation of a new cross-industry group with banks and retailers, which will focus on enhancing payment system security to prevent credit card data theft.
The move is to keep pace with the expectations from consumers, retailers and financial institutions. The group will primarily focus to adopt EMV chip technology in the U.S. The group will also address other security-related topics such as tokenisation and point-to-point encryption.
EMV cards are already used in Europe and Asia, and store information on computer chips rather than on traditional magnetic strips, which makes them harder to counterfeit. Depending on the issuer, some EMV cards also require that users enter a personal identification number (PIN) to complete a purchase process; thereby, adding an extra layer of security.
"One of the critical roles we play is to protect consumers and businesses against criminals and fraudsters," said Chris McWilton, president of North American Markets, MasterCard. "Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust. EMV will be the next step in these efforts, alongside enhanced security solutions for online and mobile channels."
The new group will include a varied group of participants in the payments systems, which includes banks of all sizes, credit unions, acquirers, retailers, point-of-sale device manufacturers and industry trade groups.
"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," said Ryan McInerney, president, Visa Inc. "As we have long said, no one industry or technology can solve the issue of payment system fraud on its own. These conversations will serve as a useful forum to share ideas, break down barriers and spur the adoption of next generation security solutions for the benefit of all."
The formation of the group follows after a few retailers such as Target and Neiman Marcus were affected by data protection breaches in late 2013. Target also released a statement confirming that around 40 million credit and debit card accounts may have been impacted between November 27 and December 15, 2013 when shoppers made a card payment in one of the retailer's 1,797 bricks-and-mortar store across the U.S.
The group's formation is still at its early stages and the names of the participating banks, retailers and other prospective organizations are still to be revealed.
