White House eyes switch to microchip cards for paying out benefits

The White House is planning an announcement calling on federal agencies to use more secure credit and debit card technology, multiple sources told The Hill.

According to one person familiar with the administration’s plans, the White House will require that most federal agencies giving out benefits on prepaid cards use ones that come embedded with a microchip, instead of or in addition to a magnetic strip on the back. The technology is known as EMV, a global standard that stands for for Europay, MasterCard and Visa.

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The change comes on the heels of massive data breaches at Home Depot, JPMorgan Chase and other businesses that have exposed millions of people’s personal and financial information and raised new concerns about the security of their data.

The White House had originally been eyeing the announcement for Friday but is likely to push it back, the source said.

The White House declined to comment on its plans.

It's unclear when the administration will require the government agencies to make the switch to the newer technology.

The industry has already mandated that retailers adopt EMV technology — which is popular overseas but has yet to make major inroads in the U.S. — by Oct. 1, 2015, or they will be deemed liable for fraud. The chips store and transmit encrypted data and are considered to be more secure than the magnetic strip common in American cards.

The White House’s announcement will highlight companies that have made the shift to the new technology, another person familiar with the plans said.

The drumbeat of data breaches at major retail stores and financial institutions has prompted calls for speeding up the transition to the cards, among other measures.

October is Cyber Security Awareness Month and the administration has made a number of moves to highlight ways to protect data networks.

It is unclear whether the White House’s announcement will require that users use PIN numbers in addition to the cards, instead of signing for purchases with a signature — a measure that some have pushed.

In response to the recent rash of hacks, lawmakers on both sides of the aisle have proposed a host of legislative fix-its aimed primarily at how consumers are notified following a breach.

Republicans and Democrats mostly agree that the current data-breach notification laws in each state present a compliance nightmare for businesses, and many have called for a national data breach notification law.

— Justin Sink contributed