Credit and Debit Cards Lag on Upgrades

In early 2014, shortly after 40 million Target customers may have had their credit or debit card data exposed by hackers amid a slew of similar cybercrimes, the retailer’s executives told the U.S. Senate Committee on the Judiciary that changes were coming. Among them, the executives said: Once banks issued American customers the chip-loaded cards Europe’s been using since the 1990s and stores retrofitted their checkout counters to work with the technology, crooks would have a tougher time stealing useful data. A couple of years earlier, card networks like Visa and MasterCard had set a deadline for most companies of Oct. 1, 2015.

The deadline’s passed, and only half of Americans have a chip-equipped card. Fewer than half of banks and credit unions have adopted chips, and barely one-quarter of retailers have, according to researcher Crone Consulting. “It’s going at a snail’s pace,” says Chief Executive Officer Richard Crone. The card companies say they’ll likely need at least two more years for the transition from old-school magnetic stripes and that the Oct. 1 target wasn’t meant to be firm. “It’s not a deadline; it’s more of a start line,” says Stephanie Ericksen, a vice president at Visa.