Obama Signs Order to Tighten Debit, Credit Card Security

Obama

With breaches on credit card security in the nation’s recent past, President Obama has now signed an executive order to tighten security for debit and credit cards. Obama announced his plans on tightening security on Friday at the Consumer Financial Protection Bureau. He stated that the nation needs to act in order to move the economy toward stronger and more secure technologies and that now American’s will have safeguards that they can rely on.

Over the last year, America has seen major credit/debit card breaches from top retail stores like Target, Home Depot, Kmart and more. With card security becoming a major issue for consumers and retailers alike, it is only fitting that something be done to further protect the lapse in technology that is allowing hackers to gain bucket loads of information from, what seems like, every swipe of a card. This ever growing issue is said to have hit President Obama really hard when his credit card was declined at a restaurant in New York. On Sept. 24 the president and his wife, Michelle Obama, were dining out at a restaurant called Estela. When Obama tried to pay his bill his card was declined, leaving him to wonder if he had been a victim of identity theft. This is supposedly what started the president on a mission to tighten the security that surrounds debit and credit cards.

So an order was officially signed putting laws into effect that would do just that. This order will place microchips in cards with PIN numbers, replacing traditional signatures, that will hopefully be equipped in every card before this time next year. It is said that all debit, credit cards manufactured from here on will have this chip in place. Cards that deliver Social Security benefits will also have these chips implanted in them.

In his comments the president said that Home Depot, Target, Walgreens, and Walmart stores will all soon be equipped with terminals that will be compatible with this type of card. Obama is also urging banks and other retailers to join his effort and equip themselves with the same types of terminals. With an estimated 100 million people being affected by breaches in the last year, the government is hoping that the new measures will keep identity theft from being such a big issue.

In addition to changing the technology of credit and debit cards, as well as the terminals, the president’s executive order also called for more relief for those who have been affected by identity theft. According to sources, The Federal Trade Commission will be developing a website where consumers can report identity theft in order to get it straightened out with credit reports. Congress will also be putting into place a “national standard” for retailers to notify customers when a data breach has occurred.

The problem with increasing security of debit and credit cards in the past has been the debate between banks and retailers. Supposedly the retailers have requested for banks to make more secure cards but the banks have argued that they can’t do such until retailers get terminals that can handle the more secure cards. Now that Obama has signed an order forcing the matters, banks will get more secure cards and retailers will get terminals that can run them.

By Crystal Boulware

Sources:

SF Gate
CNBC
Reuters
CBS New York

Your Thoughts?