Target To Be First Major Credit Card Issuer To Require PINs For Chip-Enabled Cards

While many banks and other financial institutions issuing credit cards have shifted from magnetic-strip cards to the more secure EMV smart cards, most of those companies have opted to let their customers continue signing for purchases rather than memorizing a PIN. That apparently isn’t the case for Target, which is poised to become the first major credit card issuer to convert to cards that require a PIN. 

Nearly two years after Target fell victim to a massive data breach that exposed the personal information of more than 100 million customers, the retailer is once again taking steps to ensure customer data is protected by reissuing its store-branded credit cards, the Plain Dealer reports.

The retailer began notifying customers this week that they would soon receive new account numbers, and new EMV Target-branded MasterCards that can be used outside of the retailer’s stores.

Target previously issued chip-enabled credit cards to customers, but didn’t require the use of a PIN to complete transactions.

It’s unclear if customers will have to use the PIN at other retailers, but the Plain Dealer reports that the four-digit code will be required when checking out at Target.

While Oct. 1 marked the beginning of the EMV card era in the U.S., most banks made a compromise that allowed consumers to continue signing for purchases rather than entering an actual PIN.

Transactions completed with the EMV system — named for EuroPay, MasterCard and Visa and already in use in many parts of the world — are approved using a one-time authentication code that makes it difficult for a criminal to reproduce. Even if the credit card information is gathered, without the chip the card is useless — except online.

However, chip-and-signature cards, which would still be difficult to reproduce, lack the extra safeguard of a PIN requirement.

Only a few banks have started making their customers memorize PINs for the new chip cards.

One example is First Niagara, a regional bank in upstate New York: they took over many of HSBC’s consumer branches when HSBC decided to quit the consumer banking market.

Although the bank doesn’t have very many credit card customers: only about 250,000 cards, it was the largest bank requiring their credit card customers to use PINs instead of signatures for transactions. Until now, that is.

Target converts to credit cards with PINs, not just signatures, for security reasons [The Plain Dealer]

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