MasterCard and Visa have teamed up to create a cross-industry group aimed at improving security for card transactions.
The companies said that the initiative will help them to keep pace with the expectations of consumers, retailers and financial institutions.
The move follows several high-profile data breaches at major US retailers. One of the retailers, Target, had a disastrous data breach that resulted in hackers stealing 40 million credit and debit customer details and 70 million other customer records.
This then led to the CIO, Beth Jacob, resigning from the company last week.
The cross-industry group will initially focus on the adoption of EMV (Europay, MasterCard and Visa) chip technology in the US – the chip and PIN technology already prevalent in the UK and across the world.
This would mean the cards store data on a chip rather than a magnetic strip, which makes them harder to counterfeit.
Depending on the issuer, consumers may also be required to enter a PIN that could further strengthen security.
Visa and MasterCard, along with other members of the group which include banks, credit unions, retailers, point-of-sale (POS) device manufacturers and industry trade groups, will also work on addressing other security-related topics, including tokenization and point-to-point encryption, the companies said.
“The recent high-profile breaches have served as a catalyst for much-needed collaboration between the retail and financial services industry on the issue of payment security,” said Ryan McInerney, the president of Visa.
“As we have long said, no one industry or technology can solve the issue of payment system fraud on its own.
These conversations will serve as a useful forum to share ideas, break down barriers and spur the adoption of next generation security solutions for the benefit of all,” he added.