The executive at Walmart that is in charge of card payments thinks the switch by the U.S. to credit cards that are chip-based will be a disappointment.
The new program “chip & signature” is hardly an improvement on fraud and security, says Mike Cook, the assistant treasurer at Walmart, during a conference this week in San Francisco.
Cook and Walmart would have preferred the system that both Africa and Europe have of chip and PIN, since the PINs would help protect cards from being stolen. He said the fact the U.S. did not go the way of the PIN is a joke.
Cook said that signatures for checks were enough 100 years ago, but today they are outdated. PINs for debit cards made huge improvements decades ago stopping thieves and would do the same on credit cards, which is why the banks should have them on all cards.
Cook says the signature is now worthless as a way to authenticate. If you review the breaches at Home Depot and Target, not one debit card with a PIN was reissued in both breaches. The card number, said Cook, is worthless to the thief and fraudsters since they did not have a PIN.
This is from one company adamant about adopting new technology that will stop fraud. Walmart has been somewhat ahead of the overall curve, more so than all other retailers in the U.S.
It started installing payment terminals that are EMV-capable at its stores more than eight years ago and are active today. This means a customer can dip a card that is chip-enabled, which is far safer than swiping.
In general, retailers have been quite critical of the banking industry’s decision in the U.S. to avoid the use of PINs for credit cards, calling it a just a half step toward the right thing.
For example, the UK implemented its PIN and chip and saw a huge decrease in fraud that stemmed from stolen cards and counterfeit cards.
By only using chips by themselves, the upgrade in the U.S. would only reduce problems with counterfeiting. However, both companies that are at the head of this upgrade MasterCard and Visa, say that counterfeiting is the vast majority of fraud today for credit cards.
Therefore, they want to tackle the problem that is the greatest today for banks and annoy shoppers that keep receiving cards that are reissued.
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