With all the data breaches making headline news, and more importantly, affecting millions of Americans, the Obama administration announced a strong government plan to add security for debit cards that are used for federal benefits such as Social Security.
Specifically, in an executive order signed at the Consumer Financial Protection Bureau, President Obama ordered that government agencies that process payments employ enhanced security features.
Those measures include launching a chip and PIN initiative that the government has named “BuySecure†initiative. Chip and PIN means that secure information is embedded in a chip in a credit card and users must enter a PIN number in order to use the card, much like they currently do with a debit card. The President moved without Congress on this one, which if anything highlights the importance and the need for haste in this matter.
Chip and PIN reduces the chance of fraud, as I pointed out in an earlier post (see here).
The point is that smart cards are revamped credit cards with microchips that store your data on the card. Chips are better than magnetic strips because the strips use the same technology as a cassette tape (remember those?) and thus are easy to copy. But chips generate a unique code each time they are used. So, while criminals can still steal your card and still commit fraud and sell data, they can’t copy your card and create more fraudulent ones under your name. It’s a big step in the secure data direction.
The major catch with the chip cards, until now, is that most retailers don’t have the technology for them just yet. The main companies that have had breaches have announced plans to install the new technology (this includes Home Depot, Target, etc., and it is also interesting to note that Walmart was ahead of the curve on this one).
But no doubt with the government behind this movement, it’s going to push this technology and added security into the mainstream, essentially making it the new way of doing business via credit.
Thus far there has been some foot-dragging on chips, not just because retailers will have to upscale to the new technology, but also as banks and retailers have argued over who is in fact responsible for security. This should definitely speed up, and resolve, the process.
“There is a need to act and [to] move our economy toward stronger, more secure technologies that better secure transactions and safeguard sensitive data,†the White House said in a statement.
President Obama, speaking about the motivation behind the order, said, “Identity theft is now America’s fastest growing crime. These crimes don’t just cost companies and consumers billions of dollars every year; they also threaten the economic security of middle-class Americans who worked really hard for a lifetime to build some sort of security.â€
AVG is glad that the government recognizes identity theft, cyber security, and data breaches as increasingly crucial problems. These are definitely issues that is not only a drag on the economy and businesses, but also affect peoples’ lives, and livelihood. I applaud the President’s bold move on chip and PIN.
