OAKBROOK TERRACE, Ill. -- In the wake of a breach in which data from 40 million card holders who shopped major department store Target at the start of the holiday shopping season was compromised, several media sources questioned the card-swipe method of credit- and debit-card handling that the United States still operates under, noting how other major countries use chip-based or Europay MasterCard Visa (EMV) technology instead.
Considering the heavy penalties that will hit Target as a result of such a massive breach, the impact on retailers on the whole may also be considerable—with some suggesting the move to an alternative method of payment will be hastened.
In a recent conversation with Gray Taylor, executive director of NACS’ PCATS technology organization, a race of sorts is on to reconfigure the payment methodology that we currently have here in the United States. On one hand, EMV is a mandate backed by the major credit cards, which has imposed deadlines of October 2015 for in-store point-of-sale and October 2017 for forecourt dispensers to be equipped to accept the chip-based technology. (See the January 2014 issue of CSP magazine for more on EMV.)
The use of mobile phones as a payment device has its own drivers and obstacles, with many retailers seeing more pluses than minuses as more and more Americans adopt that technology. Retailers here, for the most part, view EMV as a burdensome expense, with no upside beyond improved data security. The mobile device, however, promises more in terms of future marketing capability and loyalty.
Either way, retailers will have to invest time and resources to update equipment and inevitably help educate the public to a new form of payment. But as cases such as Target may attest, that day may need to come sooner than later.
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