The massive data breaches in U.S largest retailers 'Target', marked the largest card heists in the U.S. history in which financial credentials of more than 110 million customers were compromised, have forced the retailer to take step towards more secure transactions.
The retailer company on Tuesday said it is implementing chip-and-PIN payment card systems for its stores and will be soon working with the MasterCard to replace all of its REDcard customer cards to chip-and-PIN secured cards. The transition to chip-and-Pin-enabled REDcards is set to begin in early 2015.
"The new payment terminals will be in all 1,797 U.S. stores by this September, six months ahead of schedule. In addition, by early next year, Target will enable all REDcards with chip-and-PIN technology and begin accepting payments from all chip-enabled cards in its stores," the company said.
The chip-and-PIN system, also known as the EMV standard. Instead of using a magnetic stripe to store financial information, these cards store the data on embedded microchips. It generates a unique code for every transaction, making it nearly impossible for criminals to use the card for counterfeit fraud.
In our previous article, we explained, 'As the Target hack exposed that traditional magnetic stripe payment cards transmit your account number and, in the case of debit cards, your secret PIN to merchants, but in case of 'Chip-and-PIN' cards you're not transmitting an actual credit card number, instead it transmits a one-time-use token number that banks and card processors can match up with your account on the other end to process the transaction, but that doesn't reveal your account number, even with the merchant.'
This new move will include only the customers who use Target's branded credit and debit cards. The company will reissue both its branded and co-branded payment cards to the new and secure MasterCard's chip-and-PIN solution.
MasterCard is a technology company in the global payments industry that operate the world's fastest payments processing network in more than 210 countries and territories.
"Target has long been an advocate for the widespread adoption of chip-and-PIN card technology," said Target CFO and executive vice president John Mulligan. "As we aggressively move forward to bring enhanced technology to Target, we believe it is critical that we provide our REDcard guests with the most secure payment product available. This new initiative satisfies that goal."
"Target and MasterCard are taking an important step forward in providing consumers with a secure shopping experience, and the latest in payments technology," said Chris McWilton, president, North American Markets for MasterCard. "Our focus, together with Target, is on safety and security."
This ongoing data security enhancement effort will be under the leadership of Bob DeRodes, Target's new executive vice president and chief information officer. A former adviser for the US Department of Homeland Security and U.S. Department of Justice, DeRodes was also brought by Target for his past work in helping to secure data for a number of US banks and financial institutions.
However, Chip and Pin technology doesn't prevent an ID thief from using stolen card numbers for online or phone purchases and also cyber criminals have already found their own ways to clone Chip-n-Pin cards physically. There is no such thing as a card that is 100% safe from clever criminals.
