The National Retail Federation (NRF) has urged banks to stop using the risky signature-based credit cards and instead switch to personal identification number-based (PIN) credit cards, which provide more security for consumers, retailers and banks.
NRF senior vice president and general counsel, Mallory Duncan, said everything a fraudster needs is right there on the card including the cardholder’s name, account number, expiration date and security code.
"There are technologies available that could reduce fraud. An overhaul of the fraud-prone cards that are currently used in the U.S. market is long overdue," Duncan added.
Therefore, a PIN-based card with or without an embedded microchip is expected to provide more security.
Duncan said it is proven, effective, and relatively easily implementable.
"PIN debit cards are close to ubiquitous worldwide, and readily producible in the U.S. Chip is a desirable add-on. If speed of implementation is of importance, then substituting PIN for signature is preferable to implementing chip," Duncan added.
In addition to switching to new PIN-based cards, NRF urges bank to take new initiatives such as end-to-end encryption of data, tokenisation rather than storing data, and mobile payments to prevent fraud and data breaches.