After Target Heist, Credit Cards Set for an Overhaul

by Luke Jones  on Monday, Jan. 27, 2014 12:00 am  

“The challenge with the U.S. market is there are 8 million merchants in the U.S. that accept credit cards. That’s a big number of merchants who need to migrate over.”

Secondly, the more than 1 billion credit cards in circulation will all need to be replaced — an expensive prospect for card issuers and a complicated one for the human psyche.

“It’s a different type of card requiring a different type swipe,” Oxman said. “It’s a dip instead of a swipe.”

Arnold added that the focus in recent years has been unevenly placed on convenience at the expense of security, and the reliance on old technology is becoming even more glaring as travelers find their credit cards unusable in other countries.

From the issuer side, Oxman said, the industry has been slow to start distributing the cards to customers, with the exception being frequent overseas travelers.

The Big Switch

The good news is that this technology won’t be esoteric in America for long. Major credit card companies have established a deadline of October 2015 for most of the country’s banks and retailers to switch to EMV.

Oxman said the deadline is stretched for certain industries like gas stations, which will have to replace entire pumps to be able to accept the technology.

Wal-Mart Stores Inc. of Bentonville, for example, has long been an advocate of EMV and has already started deploying EMV terminals at its checkout lanes in preparation for the switch.

Banks have been slower to change.

“Some of the bigger banks, like Chase, are the only ones starting to issue the chip-and-pin method popular in Europe,” Arnold said. “But I think you’ll see an acceleration of that.”

Luke Wigley, president of Arvest Bank’s Security Bankcard Center, which handles all of the Fayetteville bank’s credit card processing, confirmed Arnold’s predictions.

 

 

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