|[March 26, 2014]
Retailers Urge Adoption of PIN-Based Credit Cards
WASHINGTON --(Business Wire)--
Retail Federation told the Senate today that it's time for an
overhaul of the nation's fraud-prone credit and debit card system,
saying banks' insistence on cards that use a signature instead of a
Personal Identification Number puts merchants and their customers at
risk. Indeed, card companies have continued to promulgate the use of
fraud-prone signature cards despite
their own research - conducted almost 25 years ago - that showed
that PIN-based cards provided more security for consumers, retailers and
"Everything a fraudster needs is right there on the card," NRF
Senior Vice President and General Counsel Mallory Duncan said,
describing how the cardholder's name and account number are clearly
printed on each card along with the expiration date and security code.
"The bottom line is tha cards are poorly designed and fraud-prone
products that the system has allowed to continue to proliferate."
Duncan comments came in a statement
submitted to the Senate Committee on Commerce, Science and Transportation,
which is holding a hearing today on criminal cyber attacks in which
consumer card numbers have been stolen. He said current magnetic stripe
cards with signatures are too easy to duplicate and forge.
"There are technologies available that could reduce fraud," Duncan said.
"An overhaul of the fraud-prone cards that are currently used in the
U.S. market is long overdue."
has long-advocated for replacing current cards where consumers sign
to approve a transaction with next-generation cards that would require
use of a PIN. With or without an embedded microchip, a PIN-based card
would provide greater security for consumers and retailers alike, Duncan
"Protecting all cards with a PIN instead of a signature is the single
most important fraud protection step that could be taken quickly,"
Duncan said. "It's proven, it's effective, and it's relatively easily
implementable. PIN debit cards are close to ubiquitous worldwide, and
readily producible in the U.S. Chip is a desirable add-on. If speed of
implementation is of importance, then substituting PIN for signature is
preferable to implementing chip."
Along with switching to more secure, PIN-based cards, NRF supports
additional steps aimed at preventing fraud and data breaches, including
end-to-end encryption of data, tokenization rather than storing data,
and mobile payments.
NRF is the world's largest retail trade association, representing
discount and department stores, home goods and specialty stores, Main
Street merchants, grocers, wholesalers, chain restaurants and Internet
retailers from the United States and more than 45 countries. Retail is
the nation's largest private sector employer, supporting one in four
U.S. jobs - 42 million working Americans. Contributing $2.5 trillion to
annual GDP, retail is a daily barometer for the nation's economy. NRF's
This is Retail campaign highlights the industry's opportunities for
life-long careers, how retailers strengthen communities, and the
critical role that retail plays in driving innovation. www.nrf.com
Note to media: See
NRF's Latest Ad on Data Security
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