A group of consumer advocates and nonprofit companies are urging the United States government to push for faster adaptation to chip and PIN technology in order to protect consumers.
“Congress must urge the nation’s largest credit card issuers—particularly the big banks and credit unions—to do everything they can to provide the best possible safeguards to protect consumers and their financial transactions,” said a letter signed by companies such as ProtectMyData, the Multicultural Media, Telecom and Internet Council (MMTC), the Hispanic Technology and Telecommunications Partnership (HTTP), and DiverseTech.
The groups also sent the letter to the White House, the Federal Reserve, and the Consumer Financial Protection Bureau (CFPB).
No more magnetic stripes, say consumer advocates
In most of the rest of the world, including Europe, Australia, and Asia, magnetic stripe credit cards are a thing of the past. In these countries, chip and PIN technology has replaced older magnetic stripe technology, requiring consumers to enter a PIN rather than simply sign their name in order to complete a credit card transaction. This adds another layer of security to payment transactions, making it safer for people to use their credit cards without worrying about identity theft or payment fraud.
The head of ProtectMyData, Debra Berlyn, said that requiring a PIN “adds a distinct layer of security and complexity to each transaction that dramatically reduces fraud.” And Kim Keenan, president and CEO of the MMTC, said that government leaders should “understand that extra security does not burden consumers. It frees them from concerns about the safety of their data.”
U.S. implementing chip and PIN, slowly but surely
In fact, the United States is working to catch up with the rest of the world when it comes to chip and PIN technology. President Obama signed an Executive Order requiring government-issued credit cards and point-of-sale terminals at federal buildings to use chip and PIN technology in October 2014.
The consumer groups applauded President Obama’s efforts to implement chip and PIN technology, but said the efforts do not go far enough. “The rest of America, including a growing Hispanic population that makes up 17% of the nation but only 6% of the federal workforce, needs the same protections,” said Rose Mendoza, executive director of HTTP.
Chip and PIN linked with fewer fraudulent transactions
DiverseTech founder Jeremy White said that in European countries where chip and PIN cards “have long been the standard,” there has been a significant decline in fraudulent transactions. “We are the single last G20 nation to move forward with chips, and even when we do, we are only going halfway by not requiring PINs,” he said.