Obama signs “BuySecure” initiative to speed EMV adoption in the US
Home Depot, Target also promised to start using chip-and-pin terminals by Jan 2015.
By Megan Geuss
Oct 19 2014
On Friday, President Obama signed an executive order to speed the adoption of EMV-standard cards in the US. The transition to EMV—an acronym eponymous of Europay, MasterCard, and Visa, the companies that developed the standard—has been slow to gain traction in the US. The EMV standard will require credit card companies to do away with the magnetic stripe cards that are common today in favor of cards with embedded-chips that will offer more secure credit card transactions.
Lawmakers and credit card companies confirmed earlier this year that the US would make the transition to EMV cards in October 2015. But over the past several months, retail stores like Target, Home Depot, Michaels, Neiman Marcus, and more have sustained major hacks that caused the retailers to loose credit card information and personal information of millions upon millions of customers, giving new urgency to the call for more secure credit cards.
Speaking at the Consumer Financial Protection Bureau on Friday, President Obama said that the federal government would apply “chip-and-PIN technology to newly issued and existing government credit cards, as well as debit cards like Direct Express.” The White House also said that all payment terminals at federal agencies will soon be able to accept embedded chip cards.
“The goal is not just to ensure the security of doing retail business with the government, but also, through this increased demand, to help drive the market towards swifter adoption of stronger security standards,” A White House press release said. “Institutions like the United States Postal Service have already made this transition across tens of thousands of retail facilities across the country.”
The White House said that Home Depot, Target, Walgreens, and Walmart promised to start activating EMV-compatible terminals by January 2015. American Express and Visa also pledged to start programs to acclimate small business owners and consumers to the changes that will occur next year.
The chip embedded on EMV cards creates a unique code for each transaction when the card is used, so stealing the card number is much more difficult for an attacker. In addition, EMV cards can require the customer to enter a PIN for each transaction, creating another level of security against fraud. EMV is not hack-proof, but it is considered far safer than the magnetic-stripe status quo. The standard was first adopted a decade ago in Europe where card fraud was rampant, and once the transition was complete, fraud committed by taking credit card numbers from point-of-sale terminals diminished significantly. But US retail stores and card issuers have dragged their feet in giving consumers the upgraded cards.