MasterCard and Visa Forming Group to Focus on Payment Security

By Andrew R. Johnson 

Visa Inc. and MasterCard Inc., the world's largest payments networks, said Friday they are forming a new group to speed up the adoption of technology aimed at improving credit- and debit-card security in the wake of several high-profile data breaches.

The companies said that the new group will include banks, credit unions, merchant processors, makers of payment terminals and industry trade associations. The group initially will focus on the adoption of technology that stores card data inside of a chip embedded in the credit card rather than on a magnetic strip.

Efforts to ratchet up the security of the U.S. payments systems has taken on added importance in recent months following breaches involving retailers including Target Corp. and Neiman Marcus Group Inc. that exposed millions of consumers' credit- and debit-card information.

The events have also reignited bickering between retailers and financial institutions, who have accused each other of dragging their feet on adopting technology that could limit the impact of data breaches.

"Only through industry collaboration and cooperation will we address the real and immediate issue of security," Chris McWilton, president of North American Markets for MasterCard, said in a statement.

Both MasterCard and Visa have set an October 2015 deadline for retailers to adopt the chip technology, known as EMV. Some banks have already begun issuing credit cards to their customers that contain such chips, focusing on consumers who travel frequently overseas, where the technology is common. Few merchants in the U.S. have upgraded their payment terminals in order to accept such cards, though.

Last month, numerous trade groups, including the American Bankers Association, Retail Industry Leaders Association and National Grocers Association, announced they were partnering to share information about cybersecurity threats.

Write to Andrew R. Johnson at [e-mail]

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