John Mulligan, Target’s chief financial officer, recently announced that the company plans to accelerate its implementation of smart card technology that will dramatically reduce the threat of credit and debit card fraud among customers.
Mulligan testified on behalf of Target before the Senate Committee on the Judiciary in Washington, D.C., and discussed the company’s $100 million effort to put in place chip-enabled technology in every one of Target’s U.S. stores, in response to the data breach.
Target will equip its proprietary REDcards and all of its store card readers in the U.S. with chip-enabled smart-card technology by the first quarter of 2015, six months sooner than anticipated.
“Updating payment card technology and strengthening protections is a shared responsibility and requires a coordinated response,” Mulligan said. “On behalf of Target, I am committing that we will be an active part of that solution.”
Mulligan said he’s also committed to working with the business community to find effective solution to the ongoing challenge of cyber attacks.
Target has been a prominent committee member of the EMV Migration Forum at the Smart Card Alliance, to work toward better facilitating the adoption and use of smart card technology. With the emergence of smart cards, the face of retail can certainly expect to see drastic change.
Smart cards are supposed to offer greater security than a credit card. With memory chips replacing magnetic strips, smart cards provide the storage, retrieval and manipulation of data on just the card, without having to access a computer database. This makes smart cards both a fool-proof method to prevent fraud even if the card number is stolen in a data breach and cost-effective.
These cards save retailers some of the expensive and more complicated technology that credit cards require, allowing them to put their money to better use. The new source of consumer data through smart cards opens up countless opportunities for production, distribution, and retailing of goods and services.
As Target is trying to rebuild its reputation and continue to protect its shoppers, hopefully replacing their old card system with new REDcards will be a win-win situation for Target and its customers.
By: Cassandra Steele