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President Obama Takes on Payment Security with BuySecure Initiative

President Obama on Friday unveiled a series of steps aimed at improving the security of credit- and debit-card payments, including a pledge to shift government transactions over to the PIN and chip system and commitments from major retailers and credit card providers.

In announcing the BuySecure initiative, Obama signed an executive order directing federal agencies to phase out magnetic strip credit and debit cards issued by the government, and to implement readers for the more secure PIN and chip cards in government retail locations such as national parks.

Obama also announced that the White House will convene a summit later this year focusing on payments and other issues relating to Americans’ financial security, bringing together industry stakeholders to advance best practices and encourage stronger security standards.

“We’ve all experienced the benefits of new technologies that let us buy and sell things faster and more efficiently than ever before,” Obama said in a speech at the Consumer Financial Protection Bureau.

“But there are risks that come with these technologies as well. Last year, millions of Americans became victims of identity theft,” Obama said. “More than 100 million Americans had information that was compromised in data breaches in some of our largest companies. And identity theft is now America’s fastest-growing crime.”

As part of the White House initiative, big-name retailers Home Depot, Target, Walgreens and WalMart each announced plans to accelerate the rollout of PIN and chip terminals at their stores.

Payment providers have also made a variety of commitments in association with the White House announcement. MasterCard, for instance, has pledged to offer credit and debit card customers around-the-clock identity theft resolution support and monitoring services by the end of the year. American Express said that it would roll out a $10 million program to help small businesses upgrade their point-of-sale terminals, and Visa is earmarking $20 million for an education campaign focusing on secure payment technologies.

Several trade groups, including the National Retail Federation, hailed the White House action.

“We applaud the administration for taking proactive and positive steps by adopting PIN and chip technology for government-issued debit and credit cards, among other things,” NRF President and CEO Matthew Shay said in a statement.

“This is not an issue about large retail versus small, or global financial institutions versus community banks and credit unions, or the federal government versus municipalities,” Shay added. “We all stand together in seeking solutions to prevent criminals from accessing personal financial data regarding our customers, investors and citizens through preventable data breaches.”

Obama touted the executive order and industry commitments as important steps for better securing consumers’ financial information, but also called on Congress to pass legislation stipulating the steps that companies must take to notify customers in the event of a data breach to replace the current patchwork of state laws. Obama also appealed for more comprehensive cybersecurity legislation to better protect government systems and to establish a framework for public and private entities to share information about emerging threats.

“Even though I’m taking action today without Congress, Congress needs to do its part, as well,” Obama said. “Today, data breaches are handled by dozens of separate state laws, and it’s time to have one clear national standard that brings certainty to businesses and keeps consumers safe.”

Kenneth Corbin on Linkedin
Kenneth Corbin
Kenneth Corbin
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn.