March 6 - "Increasing instances of cybercrime against retail systems in the U.S. highlight the need for EMV chip cards," Randy Vanderhoof, executive director of the Smart Card Alliance, testified this morning at the House hearing, "Can Technology Protect Americans from International Cybercriminals?" Vanderhoof testified on payments security and the increasing threat of cybercrime to steal vulnerable payment data, how EMV chip cards and terminals will make payments more secure, and the U.S. EMV migration.
In his testimony, Vanderhoof cited that cybercriminals are increasingly targeting retail store chains and that the FBI found at least 22 instances of attacks in the past year.
"The increase in attempted data breaches on retail systems is due in part to the fact that U.S. magnetic stripe card data is highly valuable to hackers who can sell it on the black market to criminals for large profits," Vanderhoof testified. "For example, the black market price for several million card accounts believed to be stolen from the Target breach was between 27 and 45 dollars each for a period of time."
Vanderhoof emphasized that it is in the best interest of the U.S. to replace magnetic stripe cards with secure EMV chip cards because it will devalue payment data for criminals. This is mainly because, if stolen, EMV data cannot be used to create usable counterfeit payment cards. Vanderhoof also explained the advanced security features in EMV chip cards that prevent counterfeit card fraud, noting that countries that have implemented EMV have seen this type of fraud decline by as much as 67 percent.
"To put these security benefits into perspective: if EMV chip data had been present in the retailers' systems that were recently victimized, the impact of the data breach would have been significantly lessened for the merchant, the card issuers and the consumers," Vanderhoof said.
Vanderhoof explained that the U.S. payments system is already more than two years into a planned four year migration to EMV chip technology.
Stakeholders have been meeting regularly at Smart Card Alliance conferences and EMV Migration Forum meetings to continue progress. To date, an estimated 10 to 15 million chip credit cards have been issued to U.S. consumers, and retailers have replaced approximately one million of the more than 10 million point of sale terminals.
Vanderhoof acknowledged that the move to EMV chip payments in the U.S. is a complex and expensive undertaking, but stressed that it is a critical one that will benefit our entire payments system. "I am encouraged by the payments industry's and merchant's recognition that we need to move to EMV chip technology quickly, and by the fact that chip cards are being issued now and retailers are moving to put in place the chip-enabled terminals to begin accepting chip transactions by the industry's target dates," he said.
For more information on EMV chip card technology, visit www.emv-connection.com.
About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.
Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit http://www.smartcardalliance.org.