The retail industry’s continued emphasis on static technologies impedes innovation and stands in the way of consumer protection, said ABA SVP Jess Sharp in an op-ed in The Hill today. Sharp criticized the retail lobby for its repeated calls to mandate chip and PIN technology, saying that doing so would not prevent future data breaches.
“The retail industry’s position… reveals the troubling gaps between retailers’ understanding of the cybersecurity landscape and what is needed to protect consumer data,” he wrote. “It is high time that they stop passing off a single tool as a panacea that will save their members big money — it is simply not true.”
Sharp pointed out that the nature of fraud has changed drastically since PIN technology was first introduced, evolving from the physical theft and use of cards to sophisticated hacking of retail data systems, which can be done from miles away. While PIN technology can help safeguard against point-of-sale fraud, it cannot offer consumers protection from online fraud where a physical card is not used. Rather than pushing to standardize this technology, Sharp said, the retail industry should take the opportunity to join banks in supporting strong data standards that provide the ability to innovate and offer more consumer protection.
“Innovation is critical,” he wrote. “But it only matters if all parties — including banks, payments networks, retailers and consumers themselves — work together to keep the system secure.”