The millions of Americans who use credit and debit cards have a lot to look forward to in 2015.  America’s retailers are leading the way toward greater payment security and more protections for consumers.  Together with our partners including government, we are working to stop cyber-criminals and protect the personal information of customers. 

In less than a year’s time, retailers hope to have “chip-and-PIN” card readers up and running in stores from coast to coast. If financial institutions also migrate to this technology on the payment cards they issue, we will be able to work together to achieve widespread introduction of vastly more secure “chip-and-PIN” cards into the United States.  


In leading the migration, retailers are helping guide the country into the 21st Century.  When the average American swipes the magnetic stripe of their credit or debit card at a payment kiosk, they may not know that they are using technology that banks have barely changed since the 1960s.  

Cybercriminals, however, are only too aware of this fact.  A recent report by Trend Micro found that the United States had more point-of-sale technology breaches than anywhere else in the world and magnetic stripe cards were specifically identified as the likely cause. 

“Chip-and-PIN,” on the other hand, uses a more secure embedded microchip to store customer information and an individual personal identification number, or PIN, for each cardholder.  Use of a PIN adds another level of security, many times more secure than other methods such as the “chip-and-signature” cards the financial institutions are issuing to customers.  A cybercriminal can easily forge your signature, but they would have a much more difficult time figuring out your PIN.  Many consumers already use PINs with their debit cards and a Federal Reserve study of debit card transactions found that those made using PINs were up to 700 percent more secure. 

Much of the world is already aware of the benefits of “chip-and-PIN.”  The United States is the one of the last remaining nations in the G 20 where magnetic stripe cards are still the norm.  “Chip-and-PIN” cards have been helping cut fraud in other countries for years now.  In fact, when a U.S.-based retailer with stores in Canada faced a data breach earlier this year, customers at Canadian locations remained largely unaffected.  Toronto-Dominion Bank suggested a significant reason for this was our northern neighbor’s pervasive use of “chip-and-PIN” cards. 

The Fed has already estimated that the United States could see a drop in fraud by as much as 40 percent once “chip-and-PIN” is adopted on our shores.  The federal government is even joining retailers as “early adopters” of this technology.  Starting next year, “chip-and-PIN” will become the new standard for government payment programs and readers for the new cards will begin appearing in government offices. 

Along with the government, many different sectors of the business community are coming together to ensure a smooth transition.  The Merchant Financial Cyber Partnership, made up of 250 executives from the retail, banking, hospitality, restaurant and other industries, released a comprehensive plan earlier this month to help chart the way forward for more secure technology for our customers. 

One group, regrettably, has chosen not to participate in the Partnership’s activities: credit unions.  They are the ones who might perhaps benefit the most from collaboration with other industries; the Credit Union Times reports that their industry won’t be able to provide their customers with “chip-and-PIN” cards by October 2015, when many retailers will already have their card readers in place in stores. 

The retail industry, among others, is taking proactive steps to usher in a more secure payments system for our customers in 2015.  Our hope is others – starting with credit unions – will work to make this the priority we believe it must be. 

Kennedy is the president of the Retail Industry Leaders Association.