Security Magazine

Target to Accelerate Chip-Enabled Smart Card Program

February 4, 2014

Target Corp will speed up a $100 million program to implement the use of chip-enabled smart cards to protect against cyber theft.

In an opinion piece on Monday in the Hill newspaper on the eve of his appearance before the Senate Judiciary Committee, Chief Financial Officer John Mulligan said the retailer's goal was to have the technology in place by early 2015, more than six months ahead of schedule, said Reuters.

The adoption of such chip-enabled cards would be "one step American businesses could now take that would dramatically improve the security of all credit and debit cards," Mulligan wrote.

He said the United States had been slow to develop the technology, which was already in wide use in other parts of the world, said Reuters.

The enhanced smart cards contain tiny microprocessor chips that encrypt personal data shared with sales terminals used by merchants. Stolen smart card numbers would be useless without the chip, said Reuters.

He noted that Target, the No. 3 U.S. retailer, had been working for years to adopt the technology, said Reuters.

"Since the breach, we are accelerating our own $100 million investment to put chip-enabled technology in place. Our goal: implement this technology in our stores and on our proprietary REDcards by early 2015, more than six months ahead of our previous plan."

Mulligan said requiring the use of four-digit personal identification numbers to complete sales transactions would provide additional safety.

"To be frank, there is no consensus across the business community on the use of PINs in conjunction with chip-enabled cards," Mulligan wrote. "But Target supports the goal and will work toward adoption of the practice in our own stores and more widely."

"The data breach that struck our company spotlighted the sophistication of criminal hacker networks operating across the globe," Mulligan wrote. "We know the attack created significant concerns for millions of customers. We will learn from this incident and we will work to make Target, and the wider business community, more secure in the future."