Home / Credit News / Target Upgrades Credit Cards with Chip Technology
In light of the recent Target hacking where millions of consumers had their information compromised, Target has come under a lot of scrutiny. As a result, Target CEO Gregg Steinhafel resigned from his position, and the company has been scrambling to update business protocol and replace executive leaders. The hacking certainly hurt Target’s business, as well as the millions of consumers who shopped there late last year.
Luckily, one good thing has come out of this mess. Target announced last week that they will be swapping out their current Target REDcards for newer models enabled with computer chips. They will be the first big retailer to move into the more advanced credit card system. With chip technology, consumers will be required to enter a PIN number at checkout. However, this is much more secure than the magnetic strip currently located on the back of credit cards. A magnetic strip is easily hacked, and can give away a consumer’s name, credit card provider, expiration date, and more. With a chip and PIN credit card, on the other hand, thieves cannot easily replicate the card, and even if they do, they would need to know the victim’s secret 4 digit PIN number. So, using cards with chip technology are significantly more secure.
Although Target will be venturing into new technology, other retailers may not want to follow. This upgrade is incredibly expensive, and many companies simply do not want to pay for it. However, the U.S. has ordered every merchant to upgrade by October 2015, when liability for credit card fraud will shift to merchants if they have not upgraded equipments or banks if they have not issued new cards. Hopefully, many retailers will follow in Target’s footsteps and do their part to prevent identity theft.
Source: CNN Money