Retailers Applaud President's Data Security Order
WASHINGTON, D.C. — Retail associations are cheering President Barack Obama's move to secure transactions and sensitive data through the new BuySecure Initiative.
The BuySecure Initiative, which the president signed Friday morning, will provide consumers with more tools to secure their financial future by assisting victims of identity theft, improving the government's payment security as a customer and a provider, and accelerating the transition to stronger security technologies and the development of next-generation payment security tools, according to a White House statement.
As part of an executive order, newly issued and existing government credit and debit cards will be required to be enabled with chip and personal identification number (PIN) technology.
"While there is no silver bullet to guarantee data security, the president is signing an Executive Order to implement enhanced security measures, including securing credit, debit, and other payment cards with microchips in lieu of basic magnetic strips, and PINs, such as those standard on consumer ATM cards," said the White House Office of the Press Secretary. "He is calling on all stakeholders to join the administration and a number of major corporations in driving the economy toward more secure standards to safeguard consumer finances and reduce their chances of becoming victims of identity theft — America's fastest-growing crime."
NACS, the Association for Convenience & Fuel Retailing, was among several industry associations applauding the move to institute the use of both microchip and PIN technology in government-issued credit and debit cards.
"NACS has been working for many years to promote the use of PIN technology, which has been successfully employed in Europe for years, resulting in dramatic reductions in fraud to the benefit of merchants and consumers alike," said Lyle Beckwith, NACS senior vice president of government relations. "PIN technology is the surest and simplest way to ensure card security. Even without the use of chip, requiring a four-digit PIN number on all credit card transactions would immediately eliminate the vast majority of card fraud.
"We agree with the president that this collaborative initiative has the potential to be a premier example of government leadership in driving positive change, in particular to accelerate the widespread adoption of next-generation payment security tools," Beckwith added. "NACS will redouble its own efforts to work with the administration, Congress and the industry to make the establishment of the highest possible protections for businesses and consumers in the very near future."
The National Retail Federation (NRF) expressed similar sentiments.
"From insisting on chip-and-PIN cards to facilitating greater information sharing among retailers and others sectors, we are committed to finding the right answers with the latest technologies to stop these cyber thieves," said NRF President and CEO Matthew Shay. "This is not an issue about large retail vs. small, or global financial institutions versus community banks and credit unions, or the federal government vs. municipalities. We all stand together in seeking solutions to prevent criminals from accessing personal financial data regarding our customers, investors and citizens through preventable data breaches."
RILA Says Merchants Are Ready
This two-factor authentication technology is in place in nearly every other G-20 country today and the reduction in fraud has been substantial, noted the Retail Industry Leaders Association (RILA).
Many merchants already have chip and PIN-enabled terminals in place and the entire retail industry is on track to have completed an enormous investment in order to be able to accept chip and PIN cards next year, the association added.
"Retailers applaud the president's action to advance card security. Today's announcement should serve as a catalyst for widespread adoption of chip-and-PIN card security. Every American cardholder deserves the highest level of security available today," said RILA President Sandy Kennedy. "The antiquated card security system in place today in the [United States] makes it far too easy for criminals to commit card fraud. Retailers are dedicated to protecting consumers and believe that chip-and-PIN technology will better shield U.S. consumers from fraud, just as it has done for consumers elsewhere around the world."
Obama also revealed the White House Summit on Cybersecurity and Consumer Protection will be held later this year to promote partnership and innovation. The summit will bring together major stakeholders on consumer financial protection issues to discuss how all members of our financial system can work together to further protect American consumers and their financial data, now and in the future.