Feds roll out secure card tech

The federal government is following through with President Obama’s call for new secure payment cards.

This month, the General Services Administration (GSA) will begin issuing new charge cards equipped with a microchip and requiring users enter a PIN number instead of a signature, it said.

Cards with those technologies are considered to be more secure than credit and debit cards with magnetic strips, which are much more common in the U.S. In October, President Obama signed an executive order to transition all government credit cards and cards with people’s federal benefits — such as Social Security payments — to use the technology, in an effort to avoid identity theft. 

By making the switch, the government “is quickly and efficiently providing greater security and even more value to the payment products and services we offer our government agency customers,” GSA Federal Acquisition Services Commissioner Tom Sharpe said in a statement.

The new chip-enabled cards issued by the GSA in January will be used by more than 350 agencies, organizations and tribal governments for purchases, travel and other purposes. More than 1 million new cards are expected to be issued this year.

Retailer companies have long pushed for financial services companies to switch to the new chip technology in combination with a PIN number. The calls have only mounted amid recent high-profile data breaches at JPMorgan Chase, Target and other businesses in recent months.

“It’s time U.S. banks and card issuers follow the lead of the federal government, put aside excuses and quit dragging their feet on credit card security,” Andrew Szente, the Retail Industry Leaders Association vice president for government affairs, said in a statement. The trade group counts Target, Wal-Mart and Whole Foods among its members.

Retail companies are still rolling out machines that accept the new chip and PIN cards, though old machines will still work with the new cards. Starting in October, businesses that have not upgraded their systems to accept the chip cards may be held liable in the event of a breach.

Tags Chip and PIN General Services Administration Payment systems Retail Industry Leaders Association
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