Lawmakers urge faster chip-and-PIN credit card adoption
The U.S. Congress should mandate that banks, retailers and payment card processors adopt new security standards to protect against widespread data breaches, some lawmakers said Wednesday.
In the wake of several high-profile retail data breaches, some members of the U.S. House of Representatives Financial Services Committee called for new cybersecurity mandates, with Representative David Scott, a Georgia Democrat, asking if Congress should require the U.S. financial industry to adopt new card security measures used in other countries.
The U.S. payments and financial system makes “things easy for fraudsters” by relying on magnetic-strip credit and debit cards instead of moving to EMV cards that contain integrated computer chips and require customers to enter PINs at the point of purchase, Scott said.
Congress is “anxious” to take action to stop data breaches, Scott said. During Wednesday’s hearing, several lawmakers noted the data breach at retailer Target affecting up to 110 million U.S. residents. “Is there any reason Congress shouldn’t mandate that payment card security standards use the most effective technology in the marketplace?” asked Scott. “I think this is a problem of soaring magnitude, and we’re going to be in trouble if we don’t get a handle on this.”
Congress should mandate higher standards, but lawmakers shouldn’t mandate specific technologies, said Edmund Mierzwinski, consumer program director at consumer group U.S. PIRG (Public Interest Research Group).
"We are still using a 40- or 50-year-old magnetic stripe obsolete technology,” Mierzwinski said. “We are now starting to move slowly” to new technologies.
Banks and payment processors have said that moving to a chip-and-PIN card system will be expensive, requiring new card-reading machines at all retailers. Visa, MasterCard and others have announced plans to move to chip-based cards by late 2015.
Some lawmakers and witnesses called for a national data breach notification law, to supersede the 45-plus state laws now on the books. A national breach notification law would make it simpler for companies to comply with the requirements and simpler for consumers to understand the notifications, some representatives of the financial industry said.
But a national data breach law shouldn’t preempt tough state laws, Mierzwinski said. And it shouldn’t, as some backers of a national law have suggested, allow companies to avoid reporting a data breach if they don’t believe thieves have gained access to personal information.
“Force companies that lost your information to tell us about it,” he said.
Other witnesses called for security standards to come from private industry. The PCI Security Standards Council, an organization that develops payment security standards, already has payment processing standards in place, including a standard for using chipped payment cards, said Troy Leach, CTO at the council.
The U.S. government should focus on prosecuting cybercriminals and on encouraging threat information-sharing between businesses and government, Leach said.
The development of payment card standards is “something we are uniquely qualified to do,” he said. “The recent breaches underscore the complex nature of payment card security. The multifaceted problem cannot be solved by a single technology, mandate or regulation.”
Other lawmakers pressed representatives of the U.S. Secret Service and the U.S. Department of Homeland Security to more aggressively prosecute cybercrime. Representative Carolyn Maloney, a New York Democrat, questioned if the U.S. government was collecting enough information about the extent of cyber and payments processing crime.
"Who’s keeping the data on how big of a problem it is in the United States?” she said. “It’s huge, in terms of national security, financial security and economic security of our country.”
The DHS is collecting as much information as it can, but businesses are not required to report data breaches, said Larry Zelvin, director of the DHS National Cybersecurity and Communications Integration Center.
"We still don’t have the visibility on everything,” he said. “It is still just a snapshot.”