Credit-card rivals Visa and MasterCard said Friday they have formed an industry-wide group aimed at improving payment security in the wake of a number of breaches that compromised customers' data.
"The recent high-profile breaches have served as a catalyst for much needed collaboration between the retail and financial services industry on the issue of payment security," Visa President Ryan McInerney said in the statement.
According to Reuters:
"The new group, which will include banks, credit unions, retailers and industry trade groups, will initially focus on the adoption of the safer 'EMV' chip technology in the United States, MasterCard and Visa said on Friday."
"EMV chip technology, already used in Europe and Asia, stores information on computer chips rather than on traditional magnetic strips. EMV stands for Europay, MasterCard and Visa, the companies that launched the technology."
As we have reported in recent months, both Visa and MasterCard have experienced embarrassing data breaches, along with high-profile customer data compromises at Target, Niemen Marcus, and JPMorgan.
"The events have ... reignited bickering between retailers and financial institutions, who have accused each other of dragging their feet on adopting technology that could limit the impact of data breaches."
"'Only through industry collaboration and cooperation will we address the real and immediate issue of security,' Chris McWilton, president of North American Markets for MasterCard, said in a statement."
"Industry leaders know magnetic stripes are outdated and easily exploitable. The rest of the world moved on to a more secure, harder-to-hack payment system based on chip-enabled cards — chip and PIN. Chip-enabled cards are more secure because the data on the chip are hidden behind encryption. So even if criminals intercept what's on it, they can't reuse it."
