EMV cards touted at breach hearing

Payment System Experts Call for Modernizing Technology

by. Jeffrey Roman

Several payment system experts testifying at a Senate hearing Feb. 3 urged the adoption of chip card technology in the wake of high-profile breaches at Target Corp. and Neiman Marcus.

“Chip and PIN is much more effective than what we have presently in the U.S. with the swipe system,” said Sen. Mark Warner, D-Va., chairman of the Senate Banking Committee’s Subcommittee on National Security and International Trade and Finance, referring to magnetic stripe cards now in use. “But we shouldn’t assume any single technology is a silver-bullet solution.”

Mallory Duncan, general counsel for the National Retail Federation, testified that mag-stripe stripes are outdated. “Fraudsters rely on our system being so porous. What’s needed is for networks and banks to issue cards that are not so easily compromised,” she testified.

Chip card technology used throughout Europe and other parts of the world, including Canada and Mexico, adheres to what is known as the Europay, MasterCard, Visa standard. The standard, which was developed in the 1990s, was implemented to reduce fraud on transactions made in-person at the point of sale.

EMV, as it’s better known, is widely regarded as being more secure than mag-stripe card technology. EMV cards contain embedded microprocessor chips that store, transmit and process encrypted information, so transactions made using the cards cannot be skimmed at the point of sale.

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