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White House Presses Industry on Payments Security

The White House is urging small online sellers and other businesses to bolster the security of their payments systems, part of a broader push the administration is making to improve the cybersecurity posture of the private sector.

On Friday, President Obama signed an executive order aimed at encouraging businesses to share more information about emerging cyber threats, and calling on government organizations to do the same.

Obama, along with top administration officials and businesses leaders, spoke at an event at Stanford University, where he stressed the importance of shoring up the digital systems that Americans rely on for more and more of their everyday activities.

“As consumers, we do more online than ever before. We manage our bank accounts. We shop. We pay our bills. We handle our medical records,” Obama said. “(T)his problem of how we secure this digital world is only going to increase.”

As part of the White House’s cybersecurity announcement, major corporations in a variety of sectors made a series of commitments aimed at improving their security defenses and working more closely with their partners.

On the payments side, payments providers such as Visa and MasterCard have thrown their support and resources behind the administration’s cybersecurity effort. Visa has pledged to roll out a tokenization system that will substitute random tokens for credit card numbers in the first quarter of this year. MasterCard has committed to invest more than $20 million to develop a set of cybersecurity tools, an effort that comes with the acknowledgement that trust and consumer confidence are essential to the success of the payments sector and all of the retailers and other businesses that rely on it.

“The fact is whether you paid with cash for stuff or you’re paying with a card or a phone or your biometric print, what you do want is safety and security in the transaction form,” said MasterCard President and CEO Ajay Banga said. “You want to make sure you aren’t getting something that comes at you which steals stuff that is yours.”

Additionally, the card processing firm Square is working with the Small Business Administration to develop an educational program that will encourage small firms to implement secure payment technologies.

Apple is on board the administration’s secure payments program, as well. The firm is working with Visa, MasterCard, Comerica Bank and U.S. Bank to make its encrypted ApplePay token service available for government payment cards.

Apple CEO Tim Cook was on hand at the event in Stanford to tout the security of the company’s payment service.

“We developed a mobile payment system that is significantly more secure than the old days of the plastic card and the magnetic stripe,” Cook said. “When you add a card to ApplePay, your actual credit card numbers are never stored on your device or in our servers.”

Administration officials emphasize that cybersecurity is as much a national security issue as it is an economic one, noting that the success of retail and other industries hinges on the ability of businesses to provide a secure environment to their customers.

“By getting this right, businesses and consumers around the world will continue to store data with American companies, buy from American retailers, process payments over American card networks, bank with American firms, and carry around American smartphones,” said Jeffrey Zients, director of the National Economic Council.

More information is available on the White House blog.

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.