Tags: credit | debit | card | security | white house | federal | agencies

White House to Require Federal Agencies to Switch to EMV Cards

By    |   Thursday, 16 Oct 2014 06:38 PM

A decade after Europe wised up about magnetic strip credit cards and massive credit card security breaches ripped off customer information from Kmart, Home Depot, JP Morgan Chase and others, the White House finally is going to announce it will require federal agencies to switch to more secure, chip-bearing cards, sometime in the not-too-far-distant future.

The Hill reports that the White House will require that federal agencies that pay out benefits on prepaid credit cards switch to EMV cards that contain a microchip, or tiny computer, embedded in them, instead of relying on the magnetic strip that credit card companies and retailers have discovered to their dismay are all too easy for sophisticated hackers to steal.

It is not known exactly when the announcement will be made, when the switch will occur or whether those using the new cards will be required to also provide PIN numbers or signatures, but most computer experts agree that it's about time.

Retailers already are facing a deadline of Oct. 1, 2015 from credit card companies to make the costly switch to EMV — which stands for Europay, MasterCard and Visa — after which they will be required to reimburse credit card users for fraudulent charges on their cards.

Home Depot, for example, reported that 56 million shoppers using their self-pay machines had their credit card data stolen by hackers, according to Wired.

In late 2013, Target suffered a similar hit on 40 million credit cards and Kmart was likewise invaded.

However, Wired notes, since England adopted EMV in 2004, credit card fraud dropped by 38 percent.

Home Depot already is installing EMV card readers in its stores, and plans to have all stores equipped with terminals which will accept the cards by the end of this year, Eweek reports.

"There was a lot of skepticism about whether it would ever happen in the US," Michael Misasi, Mercator Advisory Group analyst, told Wired. "All of the data breaches that have happened have woken people up and progress has been accelerating this year."

Credit card theft is very big business — about $11 billion a year, according to Wired — and is largely based out of Eastern Europe, where hackers sell stolen numbers in bulk to re-packagers, who then use the information to produce fake cards and use them to raid bank accounts or purchase merchandise.

Switching to EMV will close several loopholes allowing the crooks to stay in business, although some still remain, such as using United Kingdom cards with magnetic strips for fraudulent purchases in the U.S., which EMV will stop, and using stolen card numbers to make online purchases, which computer security experts hope new systems like Apple Pay and Visa's Token Service will bring to an end.

With the White House and U.S. retailers on board with the switch to EMV, David Robertson, publisher of The Nilson Report, told Wired, "There's every reason to think that the industry will get ahead of the bad guys again."

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A decade after Europe wised up about magnetic strip credit cards, the White House finally is going to announce it will require federal agencies to switch to more secure, chip-bearing cards, sometime in the not-too-far-distant future.
credit, debit, card, security, white house, federal, agencies
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2014-38-16
Thursday, 16 Oct 2014 06:38 PM
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