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  (Source: wikimedia.org)
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. 


[SOURCE: ABC News]

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 Rukkian on 2/5/2014 4:45:43 PM , Rating: 2
How often do people need to purchase online while on the go? You keep throwing more hurdles just because for some reason you are dead set there is no way something new would work.

I would be willing to bet that a large % of online purchases are at home. If you are out and about, why not just go to the store. There could probably be solutions for when somebody has to go mobile (maybe just use the old-fashioned CC #), even if it is not-secure. You would still be able to make a large % of online purchases more secure.

You also talk about how issues like this don't happen in store, but that is absolutely false, as the Target breach (there were actually 2), one was stealing the swipes at the store, which would be completely removed from the equation with a smartcard.

Put a smart card reader (have both the CC and smart card and give people a choice) for both online and in store, and it make things much more secure. Will it be foolproof? Absolutely not, but nothing is.

There will be many people who will never use an optional smart card, but if they get their cc stolen enough times, or hear about others getting them stolen, many will be willing to look into other options. There will always be some people *motoman* that cannot deal with change, and will only do if forced, but there is not much that can be done about that.


RE: Ummm...
By Motoman on 2/5/2014 9:00:05 PM , Rating: 2
quote:
How often do people need to purchase online while on the go?


You have to be clinically insane to even ask that question.

I'm sorry, you're clearly just daft and refuse to take your head out of the sand. USB card readers as a mandatory item to make online purchases is f%cking retarded, and there is quite simply no f%cking way it would ever work.


RE: Ummm...
By Rukkian on 2/6/2014 1:28:27 PM , Rating: 2
Where are you getting mandatory? I have never said mandatory, you keep putting that up there. Read something before you respond. I said have the option of a more secure payment method. If you want to use it (and be much more safe) go ahead, otherwise you the old way, and be less secure.

The key here is to give the option.


RE: Ummm...
By Rukkian on 2/6/2014 1:31:20 PM , Rating: 2
Also - you say I have to be clinically insane, (maybe I am), but I can count on 1 hand how many times I have made an online purchase while out and about. The main time I want to make an online purchase is from home. The main reason most want to make online purchases is for the convenience of doing it from home, which means they are at home.

Maybe I am in the minority, and everybody is out there getting in their car and driving around just to make online purchases, but that seems like the exception rather than the rule (at least in my clinically insane mind).


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