Visa and MasterCard Take a Stand Against Hackers
Visa (NYSE:V) and MasterCard (NYSE:MA) are now teaming up with retailers in a new cross-industry effort to improve credit card security. Several recent high-profile security breaches that resulted in consumer credit card information becoming vulnerable to fraud caused the credit card companies to decide to focus on creating better payment security.
According to a press release, the companies will at first focus on building more widespread adoption of EMV chip technology. EMV stands for Europay, MasterCard, and Visa, and was developed to create a global standard of chip-card technology. “Chip technology generates a unique code for every transaction, making it nearly impossible for criminals to use the card for counterfeit fraud,” the companies said.
Other plans for the group include exploring technologies that will help secure online transactions the way EMV helps secure physical ones. Tokenization and point-to-point encryption are being considered as ways to protect online and mobile credit card transactions. Finally, the group would like to stay one step ahead of the technological curve concerning security by “developing an actionable roadmap for securing the future across all segments of the payments industry.”
“One of the critical roles we play is to protect consumers and businesses against criminals and fraudsters,” said Chris McWilton, president of MasterCard’s North American Markets. “Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust. EMV will be the next step in these efforts, alongside enhanced security solutions for online and mobile channels.”
“The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security,” said Ryan McInerney, president of Visa. “As we have long said, no one industry or technology can solve the issue of payment system fraud on its own. These conversations will serve as a useful forum to share ideas, break down barriers, and spur the adoption of next generation security solutions for the benefit of all.”
A massive data breach from Target Corp. (NYSE:TGT) affected tens of millions of customers during the holiday shopping season after hackers stole personal data and credit card information from Target’s databases. While Target offered free credit monitoring to its customers and extended discounts, the scandal caused the retailer’s fourth-quarter revenue to drop by almost half. While analysts seem to think that Target will be able to move past the scandal eventually, the issue did bring to light the urgent need for better-protected credit card technology.
Earlier this week, Target’s Chief Information Officer, who was in charge of the retailer’s computer systems, resigned from her position. In total, about 40 million credit and debt card accounts as well as 70 million other records with consumer information were stolen from the retailer during the breach. Visa and MasterCard’s proposal is that retailers, banks, and credit card companies all work together to implement the latest security technology and stay one step ahead of the hackers.
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