While chip and PIN cards have been touted as a more secure alternative to cards with magnetic strips, the U.S. has been slow to adopt this technology. Now, with 2014 called the year of the data breach, the next year may see a surge in the use of chip and PIN cards with businesses learning from the mistakes of major retailers that have fallen victim to data breaches caused by stolen credit card and debit card information. Changes in 2014 could push the retail and financial services industry to implement greater data protection and make chip and PIN cards the new norm for everyday purchases.
Here are three reasons chip and PIN technology will be big in 2015:
Race to Meet Deadline to Upgrade POS Systems
With the rise in malware attacks against point-of-sale systems, retailers are turning to chip and PIN technology to prevent a repeat of the massive data breaches that exposed the personal and financial information of millions of consumers. By October 2015, retailers are expected to have modernized their POS systems to accept chip and PIN credit cards, PC World reported. Part of the push back against chip and PIN technology has been the cost of upgrading the system, but with the scope of data breaches growing even larger, retailers are accepting these new payment cards as a way to prevent huge financial losses.
Target Leads Retailers in Switching to Chip and PIN
Following a devastating data breach that exposed the payment card information of 40 million customers, Target aims to reinstate itself as a leader in the retail industry. The company said it will start giving out chip and PIN Target store cards in the first quarter of 2015, according to a statement. Target also said that it will begin processing chip-enabled cards in the same quarter while continuing to accept cards with magnetic strips.
"We are adopting chip and PIN technology as another layer of protection so guests can shop with even greater confidence that their personal data is secure," Target said in a statement.
Government Pressures Retailers on Consumer Info Security
Recognizing the need for stronger data security, lawmakers and government leaders are voicing support for improved payment cards through new legislation and even president-backed initiatives. President Barack Obama gave an executive order to announce the move toward chip and PIN technology for government credit cards, according to a White House statement. The pressure from the government to adopt more secure cards could cause more retailers to make the switch to chip and PIN.