Credit Card Security Upgrade Not Enough, Says One Business Executive

Credit card

The new chip-carrying credit cards are rolling out. One business executive, however, says it’s not enough.

CNN Money is reporting that Mike Cook, Wal-Mart assistant treasurer in charge of payments and a senior vice president, thinks the coming changes are insufficient.

“The fact that we didn’t go to PIN is such a joke,” Cook told CNN Money.

“Signature is worthless as a form of authentication,” Cook said during a presentation at the conference. “If you look at the Target and Home Depot breaches.. not a single PIN debit card needed to be reissued in those breaches. The card number was worthless to the individual thief and fraudsters, because they didn’t know the PIN.”

Wal-Mart has, for years, been on the forefront as far as fighting credit card fraud. Wal-Mart was one of the first companies to install EMV-capable chip card readers. EMV, or EuroPay/Mastercard/Visa readers were installed in Walmart stores as early as eight years ago. Many are being used now. Still, Cook feels that further security measures, such as having an PIN (or personal identification number) as well as the chip card for further security.

Many retailers in general are wary of the system. In the U.K., for example, a chip-and-PIN system has been introduced, and the result is a dramatic reduction of fraud issues revolving around counterfeit or stolen credit cards.

The Consumerist is reporting, however, that the current focus is on chip-and-signature credit cards, which would still use a signature to verify ownership. This method would still be difficult to counterfeit, but if it were, the credit card could still be used. With a chip-and-PIN method, the card itself could be counterfeited, but if the thief does not know the PIN, the credit card would be useless.

The credit card companies Visa and Mastercard had previously announced that the chip-and-PIN credit cards would be rolled out by the end of 2015. That has now been changed to the end of 2017. Still, both credit card companies say the chip-and-signature cards will help reduce credit card fraud by a significant amount.

Still, many want the chip-and-PIN cards for additional security. The biggest reason that companies do not switch to that method is because to make the necessary software changes for the entire industry would be exorbitant. The cost to do so would be in the millions.

“We don’t see a need for it,” Stephanie Ericksen, Visa vice president of risk products says. “[Chip-and-PIN] will have a shorter shelf life. We’re moving to new technologies and innovation.”

[Image courtesy of LinkedIn]