(Reuters) - Credit card companies MasterCard Inc and Visa Inc said they had formed a new cross-industry group to enhance payment system security across networks.
The move follows several data breaches at U.S. retailers, including one at Target Corp late last year involving the theft of about 40 million credit and debit card records.
The new group, which will include representatives from the retailing, financial and equipment manufacturing industries, will initially focus on the adoption of ‘EMV’ chip technology in the United States, MasterCard and Visa said in a statement on Friday.
EMV chip technology, already used in Europe and Asia, stores information on computer chips rather than on traditional magnetic strips. EMV stands for Europay, MasterCard and Visa, the companies that launched the technology.
MasterCard and Visa had already set a deadline of October 2015 for U.S. retailers to adopt the new payment technology.
But banks and retailers have been dragging their feet over the required upgrade, at odds over who should bear the cost, which experts say could be as much as $10 billion.
EMV cards are harder to counterfeit and better protect sensitive data through encryption.
They can also require users to enter a personal identification number, or PIN, to make purchases, adding an extra layer of security.
“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,” Visa President Ryan McInerney said in the statement.
Reporting by Aman Shah in Bangalore; Editing by Kirti Pandey