Target plans to issue chip and pin or EMV cards

Target is the first major retailer to announce it will be issuing chip and pin credit and debit cards starting in early 2015. For more information about what chip and pin or EMV cards are, read our blog post about EMV credit card processing. In addition to the new co-branded cards with Mastercard they are spending upwards of  $100 million switching their terminals to the new system according to the New York Times.

Chip and pin debit and credit cards have been standard in Europe and world wide for 10 years or more, they are considered to be more secure. In light of the massive security breach Target announced during the holiday season of 2013, this is a step in the right direction to preventing data breaches. The data breach of Target customers exposed personal or credit and debit card information of over 110 million customers, the largest breach to date. While experts have claimed that “smart” or EMV cards would not have prevented the massive breach because the stolen information was not taken directly from the physical cards, they are still a better choice for secure transactions. EMV cards are more secure because the only data transmitted during the transaction is a unique, single-use code for each transaction. This makes the card data practically impossible to counterfeit, because even if the data is stolen, it can’t be used again.

It was announced in April 2014 that the transition to “EMV” cards or chip and pin cards would happen by October, 2015 according to Visa and Mastercard. The transition has been slow in the U.S. due to restructuring and replacing terminals. Target moving toward implementing the chip and pin cards will hopefully move other retailers to transition sooner rather than later. The new EMV cards from Target will most likely still have magnetic strips on the back for compatibility with any older credit card terminals and have the card number printed on it for card not present transactions which still leaves the card open to many of the common fraud problems. While the EMV cards are not a magic wand to fraud and data breaches, it is about time the United States caught up with the rest of the modern world in electronic payment processing.

We will keep our merchants up to date with the latest EMV cards updates and we are here to help with any questions.

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