Target Enhances Security with Chip and PIN Store Cards

Testifying before the U.S. House of Representatives Committee on Small Business, Jared Scheeler, managing director of The Hub Convenience Stores Inc., indicated 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.

There is a slight inconvenience that comes with chip and PIN cards because of the need to memorize and enter a PIN for every transaction.

The FBI’s revised warning this week added that customers will still be able to swipe the magnetic strip on their credit or debit cards if they choose, or if merchants have not yet installed upgraded payment terminals. Each company requires separate certifications for credit, PIN debit and signature debit, which will be followed by pilot testing and “significant” staff training before EMV transactions can be accepted.

As reported by Wired, French forensics researchers have shown an instance where criminals have worked through the chip-and-PIN system, using what the site called a “chip-switching trick” and a piece of plastic mimicking a credit card. “Large national retail associations are using this hearing to push for a “security” solution – PIN – that wouldn’t have done anything to stop the breaches at Target, Home Depot or Michaels”, said Sam Fabens, a spokesman for the coalition, which represents banks and card companies. “Despite the cost, EMV will not reduce fraud as much as it could and should”. These scam messages suggest the consumer needs to provide information either via a link or by responding to the message before receiving a new EMV smart chip card.

“The reality is most of the (credit card) fraud is online, not face-to-face sales”, Bass said.

“Ultimately, it’s up to the issuing bank to decide”, Balfany said in an email.

“Quite frankly, we weren’t overly concerned”, he said.

Meyer said the cost of the new equipment is burdensome for businesses, adding that the chamber paid $600 for a new EMV reader.

Kara Holzapfel, manager of administration at the Evanston Chamber of Commerce said in an email that she wasn’t aware of the liability change effective October 1, and Lincolnwood Chamber of Commerce and Industry Executive Director Jacqueline Boland said she knew about the change but that the chamber had not hosted any meetings or informed local businesses about it. As such, Butterfield Chip and PIN Cards will continue to be issued with magnetic stripes and can be used at locations that do not yet have the capabilities of chip processing devices.

“I think any businesses that processes a credit card should be well aware of the changes needed to [have been] made by the end of September”, she said. The only way they can avoid that is by having, and using, a terminal with a card reader.

Campagna said he expects EMV credit card technology to stick around for the next few years, but “if it’s here in 10 years, I’d be surprised”.

As technology progresses, he said, better, more secure methods of preventing fraud will be developed.