Target Urging Chip Card Adoption
Target CEO Gregg Steinhafel is urging merchants and banks to adopt chip-based credit card technology to better safeguard consumers, a reversal from his opinion 10 years ago when Target terminated a three-year, $40 million program testing such solutions. U.S. chip-card adoption has been sluggish partly because merchants and the financial industry have so far failed to resolve issues such as card-swipe fees, but some say Target’s failed collaboration with Visa to use the chips across its stores was another factor. “Without broad industry adoption of the technology to ensure a consistent guest experience, there weren’t enough benefits at that time to continue the test,” says Target CFO John Mulligan. However, Steinhafel now cites growing traction for mass chip-card adoption, and intensifying cybercriminal breaches of merchants’ payment card networks are adding urgency to the matter. Aite Group analyst Rick Oglesby notes that weak U.S. card security compared to the rest of the world has encouraged fraud to migrate from international markets to America. Although some U.S. retailers are deploying chip-ready machines in normal upgrades of their point of sale systems, it will take about two years before most merchants have them, and those machines still need software upgrades to be fully compatible with the new cards.
From “Target Tried Antitheft Cards”
Wall Street Journal (01/21/14) Ziobro, Paul; Sidel, Robin