Credit and Debit Card Ratings

Target Speeds Move to EMV Cards

Target has vowed to do what it can to speed the US’s transition to more secure payment card technology.

In testimony before the Senate Judiciary Committee, Target Chief Financial Officer, John Mulligan, said that one of the company’s responses to the massive data breach that impacted tens of millions of its customers in late 2013 would be to equip all 1,800 of its U.S. stores with card readers able to process EMV card transactions by the beginning of 2015. The new timeline announced by Mulligan is over six months earlier than Target’s previously stated goal for implementing smart card technology in its stores. EMV cards, also known as smart cards, are considered far more difficult for hackers to compromise than the magnetic stripe technology currently used by most credit and debit cards.

Additionally, Mulligan told lawmakers that Target’s own REDcards will also transition entirely to EMV technology. “Updating payment card technology and strengthening protections for American consumers is a shared responsibility and requires a collective and coordinated response,” Mulligan said. “On behalf of Target, I am committing that we will be an active part of that solution.”

Target is undoubtedly motivated to speed up its move to EMV technology by the avalanche of negative attention and subsequent hit to its profits caused by the data theft. Still, most security experts believe it’s the right move. EMV technology is a far tougher nut for data thieves to crack than magnetic strip technology, which has long been the security norm in the U.S. Because EMV cards contain a microchip that must be authenticated with a personal identification number – hence the technology’s other name, chip and PIN – they are far less vulnerable to identity fraudsters than magnetic swipes.

In countries around Europe and throughout the globe, the fact that EMV cards are standard has reduced the amount of identity theft significantly. The replacement of magnetic strip technology with EMVs certainly won’t end data theft altogether. As Mulligan noted in his Senate testimony, Target cannot force the whole country to embrace EMVs. It will require broad support from other retailers and card issuers for all U.S. consumers to get the benefit of the elevated protection offered by EMV cards.

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  • Target Speeds Move to EMV Cards

    Target Speeds Move to EMV Cards

    Target has vowed to do what it can to speed the US’s transition to more secure payment card technology.

    In testimony before the Senate Judiciary Committee, Target Chief Financial Officer, John Mulligan, said that one of the company’s responses to the massive data breach that impacted tens of millions of its customers in late 2013 would be to equip all 1,800 of its U.S. stores with card readers able to process EMV card transactions by the beginning of 2015. The new timeline announced by Mulligan is over six months earlier than Target’s previously stated goal for implementing smart card technology in its stores. EMV cards, also known as smart cards, are considered far more difficult for hackers to compromise than the magnetic stripe technology currently used by most credit and debit cards.

    Additionally, Mulligan told lawmakers that Target’s own REDcards will also transition entirely to EMV technology. “Updating payment card technology and strengthening protections for American consumers is a shared responsibility and requires a collective and coordinated response,” Mulligan said. “On behalf of Target, I am committing that we will be an active part of that solution.”

    Target is undoubtedly motivated to speed up its move to EMV technology by the avalanche of negative attention and subsequent hit to its profits caused by the data theft. Still, most security experts believe it’s the right move. EMV technology is a far tougher nut for data thieves to crack than magnetic strip technology, which has long been the security norm in the U.S. Because EMV cards contain a microchip that must be authenticated with a personal identification number – hence the technology’s other name, chip and PIN – they are far less vulnerable to identity fraudsters than magnetic swipes.

    In countries around Europe and throughout the globe, the fact that EMV cards are standard has reduced the amount of identity theft significantly. The replacement of magnetic strip technology with EMVs certainly won’t end data theft altogether. As Mulligan noted in his Senate testimony, Target cannot force the whole country to embrace EMVs. It will require broad support from other retailers and card issuers for all U.S. consumers to get the benefit of the elevated protection offered by EMV cards.

  • U.S. Government Urges Changes To Student Debit Cards

    U.S. Government Urges Changes To Student Debit Cards

    Debit cards and prepaid debit cards available to college students have plenty of room for improvement. That is the overriding conclusion of a recent report issued by the U.S. Government Accountability Office, or GAO, the investigative arm of the U.S. Congress.

    The GAO opted to scrutinize student debit cards because the number of universities and colleges that have entered into agreements with financial companies to provide these products has been on the rise recently. According to the GAO report, 852 schools, or about 11 percent of all U.S. universities and colleges, have inked deals to provide debit and prepaid debit cards to students.

    Not only have the number of agreements to provide student debit cards been on the rise recently, the GAO says that most of the cards currently available are used by schools to disburse financial aid and other funds. Some schools also utilize student debit cards as a form of identification.

    Government investigators cited a number of specific areas where cards could be more student-friendly, including in the realm of fees. Although the GAO discovered that fees associated with student debit and prepaid debit cards were comparable with other available products, there were some exceptions. In particular, some student debit cards levied a fee on students who made purchases using a personal identification number (PIN) instead of a signature. This is a fee most mainstream cards don’t impose, note the report’s authors.

    The GAO report also noted the potential problem of fee-free ATM access for the users of student debit cards. Although officials at nine of the schools surveyed by the GAO didn’t highlight any problems with the availability of fee-free campus ATMs, the report says that the lack of any specific guidelines regarding their availability could be problematic. Currently, the Department of Education requires that students receiving federal financial aid via a college card have “convenient access” to ATMs that do not charge fees, although there is no exact definition of what constitutes convenient.

    The other major finding by the GAO regarded whether or not schools were encouraging students to obtain a card from a particular provider. In some cases, colleges have been pushing certain student debit cards rather than providing objective information about various products. The GAO report speculates that this may be due to financial incentives schools receive based on how many students sign up. The report also found that contracts between the financial institutions providing student debit cards and the schools were not publicly available.

    To counteract what it sees in the current arrangement between schools and debit and prepaid debit card providers, the GAO has several specific recommendations. To improve transparency, it suggests that Congress require that agreements between schools and financial institutions be filed with the Consumer Financial Protection Bureau (CPFB) and be made available to the public. Additionally, the GAO urges the Department of Education to ensure that any school utilizing student debit cards to deliver federal financial aid make available objective information about payment options available to students. Additionally, the GAO suggests the Department of Education better define what “convenient access” to fee-free ATMs means.

     

     

     

     

     

     

     

     

Credit and Debit Card Ratings