The new "chip & signature" program is barely an improvement on security and fraud, said Mike Cook, Wal-Mart's assistant treasurer and a senior vice president, at this week's Electronic Transaction Association's Transact conference in San Francisco. Cook said Wal-Mart would have preferred a "chip and PIN" system that Europe and Africa have, since PINs would protect cards from being stolen.
"The fact that we didn't go to PIN is such a joke," Cook told CNNMoney. Cook said signatures on checks were sufficient 100 years ago, but they're outdated today. PINs on debit cards were a major improvement to stop thieves decades ago. They'd do the same for credit cards -- which is why banks should use them for all cards.
This comes from a company that's been adamant about adopting technology to stop fraud. Wal-Mart (WMT) has been ahead of the curve -- more so than any other U.S. retailer. It started installing EMV-capable payment terminals at its stores eight years ago, and they're already active today. That means you can dip a chip-enabled card there, a safer way to pay than swiping.
Retailers in general have been critical of the U.S. banking industry's decision to avoid PINs on credit cards, calling it a half-step in the right direction.
The United Kingdom, for example, implemented chip-and-PIN and saw a dramatic decrease in fraud stemming from counterfeit cards and stolen cards. By using chips alone, the American upgrade would only cut down on counterfeiting.
