Print 74 comment(s) - last by Rukkian.. on Feb 6 at 1:31 PM

Smartcards have tiny microprocessor chips instead of magnetic strips

Target was the victim of a major security breach over the holiday season last year, and as a result, the retail chain is calling for the implementation of smartcards. 

John J. Mulligan, chief financial officer and executive vice president for Target, wrote his company's case for smartcards in The Hill this week, saying that the business community in the U.S. needs to embrace the new technology together.

Smartcards, unlike current credit and debit cards used in the U.S., have a tiny microprocessor chip that encrypts the user's personal data shared with the merchant's sales terminals. Traditional credit and debit cards have a magnetic strip instead, which hold's the user's information, but can clearly be compromised. If a smartcard number is stolen, it's useless without the microchip. 

To show Target's dedication to the smartcard cause, it's speeding up its goal of bringing its REDcard smartcards to all Target stores by early 2015 -- six months earlier than its previous goal. The chain is making a $100 million investment in the technology to accomplish this goal.  

Mulligan also noted that the requirement of a four-digit PIN number with all smartcard transactions could further protect customer information. 


Target said other countries like Canada and the United Kingdom have already deployed smartcards, and that cases of lost or stolen cards have decreased since they've done so. However, the U.S. is slow to adopt the technology because the cards are expensive to produce, and merchants, issuers, banks and the networks haven't found a way to share the costs. 
"The reported attacks on Target and Neiman Marcus underline the need to do more," said Mulligan. "At Target, we know we have work to do. For years, we made significant investments in security. We had multiple layers of protection in place. But we still came under attack by sophisticated, global criminals. We will do everything we can to further strengthen Target's systems."
Target attempted to deploy chip-enabled cards around 10 years ago, but since it was the only retailer to do so on that scale, it failed. The cards were too expensive to produce, and since Target was the only one with such a card, customers couldn't use it elsewhere, making it inconvenient and a bit confusing. 
Target's breach ran from November 27 through December 15, where customer information like their names, card numbers, expiration dates and CVV verification codes were compromised. Around 40 million customers had their credit cards compromised and 70 million had their customer records stolen.

Source: The Hill

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RE: Ummm...
By arazok on 2/4/2014 3:40:33 PM , Rating: 2
Exactly. The banks have been rolling these out for the past 5 years in Canada, and as far as I know they are impossible to hack without the PIN, which the retailer never gets their hands on.

The chip is useless for online transactions, so any theft of your information would limit them to online purchases. It’s saved the banks billions in prevented debit card fraud.

Good luck to you guys getting those rolled out. In Canada we have major 5 banks, so it was easy for them to get together and roll out this technology. The US has 3,000 banks. I can’t fathom how they will implement this in a timely manner.

RE: Ummm...
By Reclaimer77 on 2/4/2014 3:51:59 PM , Rating: 1
The banks have been rolling these out for the past 5 years in Canada

Well that settles it. Now we KNOW they're a bad idea :)

RE: Ummm...
By arazok on 2/4/2014 4:03:38 PM , Rating: 5
Look, we’re sorry about Justin Beiber already. We didn’t know.

RE: Ummm...
By Reclaimer77 on 2/4/2014 4:10:15 PM , Rating: 3
Pffft you're still on making penance for Celiene Dion! lol :P

RE: Ummm...
By retrospooty on 2/4/2014 5:47:31 PM , Rating: 2
LOL... OK, but Kristen Kruek, Neve Campbell, Nina Dobrev and Shay Mitchell... they can be forgiven.

RE: Ummm...
By Pneumothorax on 2/4/2014 7:02:37 PM , Rating: 2
Don't forget Cylon #6. Dang she's hot.

RE: Ummm...
By Spookster on 2/4/2014 4:12:41 PM , Rating: 2
At least you keep us entertained with that Mayor Rob Ford. Too bad Chris Farley is dead because he would be a great choice to portray him in any movies in the works.

RE: Ummm...
By arazok on 2/5/2014 9:26:40 AM , Rating: 2
RE: Ummm...
By Spookster on 2/4/2014 4:18:30 PM , Rating: 2
We're up to 247,000 signatures to send Justin back to you.

RE: Ummm...
By hpglow on 2/4/2014 5:21:11 PM , Rating: 2
I'm sure once the irs sees how much the B payes in taxes he won't be going anywhere.

RE: Ummm...
By ritualm on 2/4/2014 6:18:35 PM , Rating: 2
I'd like to see Bieber's Canadian citizenship revoked for the lulz. Seriously though, dude's plenty old enough to drink and yet he acts like a Harvard freshman jock.

RE: Ummm...
By DanNeely on 2/4/2014 3:52:53 PM , Rating: 2
What Target's doing probably is the best way to bring it forward. If a few other major retailers also upgrade their card readers, hopefully without having to get epically pwned first, they'll collectively overcome a large chunk of the chicken/egg problem by providing a widespread network that can use the new form of card.

RE: Ummm...
By imaheadcase on 2/4/2014 4:21:26 PM , Rating: 1
They are useless for online purchases? Then they are useless for consumers.. how else would you buy things online..

Most people my age buy majority of stuff online anymore.

RE: Ummm...
By ritualm on 2/4/2014 6:13:02 PM , Rating: 2
Electronics and vacation purchases maybe, but I don't buy groceries and order pizza online. I'm going to a physical store, where I still have the option to pay with cash.

RE: Ummm...
By Cargan Ricman on 2/5/2014 2:00:30 AM , Rating: 2
Chip+Pin is far more secure than cash.

RE: Ummm...
By Cargan Ricman on 2/5/2014 1:59:28 AM , Rating: 2
All you have to do to use them for online transactions is to just buy a usb smartcard reader for your computer (they're cheap) and bam, now you can use your smartcard to purchase goods online. What's so hard about that?

RE: Ummm...
By Motoman on 2/5/2014 10:59:51 AM , Rating: 2
What's so hard about that?

The fact that it has to be done at all. Except for a few outliers, no one will do that.

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