After the Target and Neiman Marcus security breaches, one would assume that U.S. retailers were doing what they can to help prevent another incident. However, Bloomberg Business Week is reporting that many retailers are still vulnerable to credit card fraud.
Many companies are still behind scheduling an updated system that complies with EMV. Right now credit card networks have until October 2015 to upgrade their payment systems.
The reason why there is a push for EMV, is because it is considered to be safer and it’s hard to copy account numbers and security codes from chips and magnetic stripes.
However, the big issue for retailers is the price. According to Javelin Strategy & Research, the average cost ranges between $500 to $1,000 per payment terminal. But that hasn’t stopped retailers like Walmart, Kroger and Target to go ahead with the upgrade.
"We saw the fact that it was being implemented in the U.K. and many other countries around the globe; we saw the fraud decrease once this solution was implemented,” Mike Cook, assistant treasurer at Wal-Mart told Bloomberg Business Week.
According to the National Retail Federation, banks and card companies would also need to do their part by making and issuing chip-enabled cards. But businesses like First Data feel that the investment is too high to implement so soon.
"We’ve got 10 million cards in inventory out in the field,” Mark Putman, Senior Vice President for First Data (KKR) told Bloomberg Business Weekly. “At $2, we are probably looking at a $20 million investment, which I am going to defer for as long as possible."
Out of the 1 billion cards that are in use in the U.S., only 20 million have been issued. By the 2015 deadline if the current trend continues, only 20 to 30 percent of U.S. cardholders will have the new cards.