Obama announces plan to tighten card security

AP Photo/Evan VucciPresident Barack Obama smiles as he arrives to deliver remarks at the Consumer Financial Protection Bureau

Saying more must be done to stop data breaches affecting consumers, President Barack Obama announced Friday a government plan to tighten security for the debit cards that transmit federal benefits like Social Security to millions of Americans.

Cards issued by the federal government will now have an internal chip replacing magnetic strips to reduce the potential for fraud. Concern is growing over the security of Americans' financial data, with an estimated 100 million people having been affected by breaches in the past year, including at big retailers like Target and Home Depot.

In addition, the government will apply the security chips and personal identification numbers, called PINS, that replace signatures to all existing and newly issued government credit cards, Obama said. Payment terminals at federal government facilities will be equipped to handle cards with the new technology.

In remarks at the federal Consumer Financial Protection Bureau, Obama said that for victims of fraud and identity crimes, the experience is infuriating and heartbreaking. He said the problem requires a hands-on approach across the government.

The White House says the idea of the government program is to lead by example, to nudge the broader financial industry and retailers toward more secure standards.

Obama noted that Home Depot Inc., Target Corp., Walgreen Co. and Wal-Mart Stores Inc. plan to install payment terminals in their stores equipped to handle cards with digital security chips and personal identification numbers, called PINS, that replace signatures.

Obama also cited a plan by American Express Co. to support small businesses that upgrade their payment terminals with more secure standards, and a program by payments processor Visa Inc. to inform consumers and merchants about the new technologies.

“There is a need to act, and to move our economy toward stronger, more secure technologies that better secure transactions and safeguard sensitive data,” the White House said in a statement.

Obama's executive order also calls for the government to take new measures to help victims of identity theft. The Federal Trade Commission will develop a new website for consumers to report identity theft and remedy errors with credit reporting

In the wake of the massive data breaches, the financial and retail industries have been at odds over solutions and adopting new security technology. The retailers have insisted that banks must upgrade the technology for the credit and debit cards they issue. Banks have countered that retailers must tighten their own security systems for processing card payments. They say it isn't clear whether the digital chips would have prevented many of the retail breaches.

Barack ObamabusinessFinancial data securityScience & Technology

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Small, impassioned crowd celebrates the Fourth of July with protest for affirmative action

Lawmakers and marchers urge voters to pass Proposition 16 in the November ballot

Union threatens legal action after Police Commission expands use-of-force policy

San Francisco’s police union is pursuing legal action after the Police Commission… Continue reading

Giants announce health guidelines for Oracle Park

The San Francisco Giants announced Friday that the organization’s maintenance team will… Continue reading

Restorative art on the inside and out

Curator Ericka Scott organizes exhibition of works by prisoners

City Attorney seeks to recoup ‘illegal profits’ gained by Walter Wong through city contracts

San Francisco will seek to recover “illegal profits” gained by well-known permit… Continue reading

Most Read