Pressure to migrate to new payment technologies is creating fresh data security risks for consumers, according to retailers, financial institutions, processors and other stakeholders in the U.S. payments industry.

The Ponemon Institute recently surveyed about 750 IT, security and risk management professionals from payment industry organizations based in the U.S. to get a sense of the prevailing security concerns in the sector.

Considerable Concern

The survey, titled “Data Security in the Evolving Payments Ecosystem” and conducted on behalf of Experian Data Breach Resolution, revealed considerable concern among stakeholders for emerging new payment technologies like virtual currencies, mobile payments, e-wallets and near-field communications (NFC).

About 65 percent of the survey respondents pointed to virtual currencies as raising new data security risks. Nearly 6 in 10 felt the same way about mobile payments in stores, while 58 percent confessed to being nervous about the security implications of e-wallets. Similar proportions expressed concern over the security implications of NFC, online payments and mobile payment applications.

Overall, respondents appeared somewhat optimistic about the ongoing migration of the U.S. payment systems to credit and debit cards based on the Europay, MasterCard and Visa (EMV) smart card standard. Nearly 60 percent said the new technology was an integral part of their payment security strategy, while 53 percent believed it would help boost card data security.

Broad Security Awareness

The recent string of high-profile data breaches at organizations like Target, Home Depot, Sony and JPMorgan Chase appears to have heightened awareness of security risks in the payment card industry. According to the survey, approximately 70 percent of the respondents said these breaches had made C-level executives more supportive of increased spending on data security. That’s good news for many security professionals, about 67 percent of whom said they lacked the resources to combat threats posed by hackers and criminals, while 4 in 10 said they did not have the technology to properly secure payment card information against threats.

Even so, the survey found a majority of stakeholders choose consumer convenience over security. Despite the relatively high proportion of respondents expressing concern over the security implications of new and emerging payment technologies, only 24 percent felt the risks outweighed the benefits of implementation. Additionally, 7 in 10 agreed or strongly agreed that investments in consumer convenience were more important than security.

A Revealing Look at Data Security

The results provide a revealing look at attitudes toward payment security at a time when U.S. retailers are in the midst of a massive migration to EMV smart card technology. The U.S. is one of the few remaining developed nations where cards with magnetic stripe technology are still used. Other parts of the world have long ago migrated to EMV cards, which store cardholder data on a tiny microprocessor embedded in it. More than 40 percent of all payment cards and 70 percent of payment terminals outside the U.S. are already based on the EMV standard, Payments Leader reported.

Security experts consider EMV cards to be a lot harder to clone or steal data from compared to cards based on magnetic stripes. But shifting to the technology requires retailers and other stakeholders such as card-issuing banks and payment processors to make considerable investments in new technology. Many retailers will need to rip out and replace their entire point-of-sale infrastructure to accommodate EMV chip transactions. It is an effort expected to cost billions of dollars to complete, but analysts believe the migration is worth it because of the enhanced data security.

Concerns raised by recent data breaches have accelerated efforts by Visa and MasterCard to get retailers to migrate to smart card technology. Under the current schedule set by the credit card associations, most retailers have until the end of October to adopt payment systems that are ready to accept EMV card transactions.

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