Securing Credit Cards: Disagreements Between Banks and Retailers

Disagreement between merchants and banks over who should pay more for security is the biggest obstacle to implementing a chip and PIN payment card system in the United States. All electronic-payment participants concur that additional security is necessary, and this security should span from the card-issuing banks to the payment processors. “The question is, how much more fraud do the banks want to tolerate?” says Gartner Research analyst Avivah Litan. Nevertheless, Litan understands the U.S. resistance to a chip and PIN transition, given the enormous costs involved. The banking industry says it is willing to cover the cost of new cards, but it should be retailers’ responsibility to pay for new card-swipe terminals.  

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