By Julian Hattem - 10/17/14 11:27 AM EDT
President Obama on Friday signed an executive order to move the government toward more secure payment cards, a measure designed to help fight the recent rash of data breaches at high-profile businesses.
The move would protect people from financial fraud, he claimed, amounting to "one more brick in that bridge that we provide to hopefully all Americans so that they can translate their dreams into reality."
"You should be able to buy the things that you need without risking your identity, your credit score or your savings," Obama said before signing the order at the Consumer Financial Protection Bureau in Washington.
The new order will call for all government credit cards and cards that deliver people’s benefits — such as for Social Security payments — to use a new, more secure technology that relies on a digital chip in addition to a magnetic strip on the back.
People using cards mandated under the new order will also be able to use a PIN number instead of a signature, a method considered more secure and the preference of many retailers.
Many American retailers were already planning to switch to the new technology by October 2015, at which point shops that have not switched over will be liable for any fraud. But the Obama administration's announcement could help speed up that process.
Additionally, the administration is beefing up protections for people whose identity has been stolen by helping the Federal Trade Commission set up an online resource for identity theft victims and expanding agencies’ practices of sharing data about stolen information to affected companies.
A third leg of the new plan will lead to a White House summit for businesses to share ways to fight off hackers and defend their networks.
On Capitol Hill, lawmakers have long debated some response to the rash of hacks but have so far been unable to make any progress.
One popular proposal would see the creation of a national standard for companies to notify people if their data may have been stolen. This would replace the current patchwork of state laws.
Obama said on Friday that Congress should finish the job on that measure.
"It's time to have one clear national standard that brings certainty to businesses and keeps consumers safe," he said.
Obama will formally unveil the new order in an event at the Consumer Financial Protection Bureau on Friday.
The plan received swift praise from both the retail and financial industries, which said it would help protect people’s personal and financial data.
“Today’s announcement should serve as a catalyst for widespread adoption of chip and PIN card security,” Sandy Kennedy, head of the Retail Industry Leaders Association, said in a statement. “The antiquated card security system in place today in the U.S. makes it far too easy for criminals to commit card fraud.”