Diverse Groups Call for the Implementation of Chip and PIN Technology

Urge Congress to be mindful of this consumer protection in the context of data security legislation
WASHINGTON – In acknowledgment of “Cyber Week” on Capitol Hill last week, and in recognizing that data breach discussions continue to evade the need for enhanced credit card security measures, a diverse group of consumer advocates and national nonprofits today called on government leaders to help make chip and PIN technology a reality in the U.S.

“We feel Congress must urge the nation’s largest credit card issuers – particularly the big banks and credit unions – to do everything they can to provide the best possible safeguards to protect consumers and their financial transactions,” the letter reads. It is signed by ProtectMyData, the Multicultural Media, Telecom and Internet Council (MMTC), the Hispanic Technology and Telecommunications Partnership (HTTP) and DiverseTech. The letter, sent to Congress, was also addressed to the White House, the Federal Reserve, and the Consumer Financial Protection Bureau.

As the letter argues, despite the ongoing transition from magnetic stripes to chip-enabled cards that encrypt data at point-of-sale terminals during transactions, those cards still rely on a signature as a secondary form of verification. This is a non-credible element of security, the ad hoc group argues though, as it can be easily forged or altogether ignored.

“We all know, chip-enabled cards must be coupled with the requirement that consumers enter a personal identification number (PIN) to properly authorize a transaction,” said Debra Berlyn, leader of ProtectMyData. “The PIN requirement adds a distinct layer of security and complexity to each transaction that dramatically reduces fraud.”

Since payment processes are increasingly diverse and connected to extensive networks and data centers, ensuring their security at the point-of-sale is a critical step in protecting American consumers and catching up to the rest of the world.

“MMTC believes that data privacy and security are essential to securing trust in retail transactions, especially for the consumers we represent,” stated Kim M. Keenan, president and CEO of the Multicultural Media, Telecom and Internet Council.  “It is important for legislators and the relevant government agencies to understand that extra security does not burden consumers.  It frees them from concerns about the safety of their data.”

In October 2014, President Barack Obama issued an Executive Order requiring chip and PIN technology for government-issued credit cards and upgrading point-of-sale terminals at federal buildings. But for the rest of America, those protections are not yet a reality.

Rosa Mendoza, Executive Director of the Hispanic Technology and Telecommunications Partnership, argues this is unacceptable. “We appreciate the efforts of President Barack Obama to position chip and PIN as a common sense solution and applaud his efforts to make that technology available to public-sector employees,” Mendoza says. “But the rest of America, including a growing Hispanic population that makes up 17 percent of the nation but only 6 percent of the federal workforce, needs the same protections. Until we all can reap the rewards of a PIN instead of a useless signature, Executive Orders and statements of support for the technology ring hollow.”  

Given the widespread use of chip and PIN technology across the world, most prominently in Europe and Australia but also in less developed nations in Africa and Asia, the group argues that it is perfectly reasonable to expect the same standards here in the United States.

“Chip and PIN cards have long been the standard in many European countries where they have experienced a sharp decline in counterfeit and fraudulent transactions,” says DiverseTech founder Jeremy White. “We are the single last G20 nation to move forward with chips, and even when we do, we are only going halfway by not requiring PINs. This is despite the fact that the two-prong protection reduced in store fraud in Canada by 50 percent and 70 percent in the United Kingdom.”