MasterCard and Visa have formed a new group that will work to speed up the use of several new technologies, including chips and digital tokens. This move comes after a series of recent security breaches put consumers’ credit and debit card information at risk.
The newly-formed group will bring together companies from all sectors of the industry, including banks, merchant processors, credit unions, trade associations, and companies that create payment terminals in an effort to prevent future credit card fraud.
It’s all about technology
One of the primary areas they will be focusing on is the adoption of EMV (Europay, MasterCard, Visa) technology in the U.S. This technology is widely used in Europe and provides an additional layer of security to protect consumer data at the register. Credit cards are embedded with EMV chips rather than magnetic strips, which store the users data. Each transaction is given a unique code, which makes it almost impossible for criminals to use the cardholders information to commit counterfeit fraud, according to payment processors.
With EMV technology, cardholders dip rather than swipe their cards when using them at the register. MasterCard and Visa have set October 15 as the deadline for adopting EMV technology by retailers.
Along with EMV technology they will be taking a close look at tokenization and point-to-point encryption. These technologies will be used to secure consumers data when they are making payments or purchases with their smartphone or computers. With tokens the individual’s account number does not appear on the transaction. Instead it is replaced with a digital token or payment code, which adds another layer of security to the process.
The group will also be mapping out other initiatives to provide consumers, as well as retailers, banks and financial institutions, with additional avenues of security in the future.
These efforts come on the heels of several high profile security breaches in retail outlets. Target’s
payment processing system was compromised last year putting 40 million cardholders data at risk. While in January Neiman Marcus Group confirmed that their payment processing system was also breached.