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Sunday, December 11, 2016

By Lindsay Wise, McClatchy Washington Bureau

WASHINGTON — Recent high-profile data breaches at Target and Neiman Marcus have accelerated plans by banks and retailers to implement technologies they say will prevent hackers from stealing consumers’ account information.

Malware installed in Neiman Marcus payment terminals exposed 1.1 million debit and credit cards from July to October last year, while the Target incident compromised the personal information of more than 110 million customers in November and December.

The sophistication and scope of the recent breaches has lent increased pressure to the adoption of a new generation of microchipped debit and credit cards and a cutting-edge technique known as “tokenization” to protect online and mobile purchases.

Industry experts say the technologies will limit the volume and value of consumer data stored by retailers, who no longer will have to safeguard sensitive details such as card numbers, PINs and security codes.

“It’s not just about protecting consumers from financial loss or the system from financial loss; it’s really about maintaining trust,” said Ellen Richey, executive vice president, chief legal officer and chief enterprise risk officer for Visa Inc.

In the aftermath of the breaches, Visa and MasterCard announced the formation of a new cross-industry security working group focused on speeding up and coordinating the adoption of the new technologies.

“We were pushing that direction, but this Target event has given it the kind of urgency that it didn’t have before,” Richey said.

Banks already are starting to issue debit and credit cards embedded with microchips, also known as EMV, which stands for Europay, MasterCard and Visa. The system is widely used in Europe. More than half of all credit cards in the U.S. are expected to shift to EMV by 2016.