"It's not just about fraud and losses, it's about the trust involved in electronic payments that's destroyed," says Ellen Ritchey, Visa's chief enterprise risk officer.
In March, Visa and MasterCard announced plans to bring together banks, credit unions, retailers, makers of card processing equipment and industry trade groups in a group that aims to strengthen the U.S. payment system for credit and debit cards. The initial focus of the new group will be on banks' adoption of chip cards.
That comes ahead of a liability shift set to occur in October 2015, when the costs resulting from the theft of debit and credit card numbers will largely fall to the party involved with the least advanced —and most vulnerable— technology. For example, if a bank has updated to chip technology, but the retailer involved hasn't, the retailer will be liable for the costs.
Stasiak says many of the retailers he works with already have the technology in place. Once the banks start issuing chip cards, the retailers will activate their new systems, he says.
Banks say that despite the jump in high-profile data breaches, fraud still accounts for a small fraction of total transactions processed, while the cost related to issuing chip cards to all of their customers and switching out all of their ATMs is substantial. Banks have urged lawmakers to make retailers more accountable for their own security in hopes of recouping more of the losses from cybercrime.
Richard Hunt, CEO of Consumer Bankers Association, says that in cases of major fraud, banks have generally been able to collect only pennies on the dollar from the retailers involved.
Hunt says even if banks put chips in cards, it won't do any good if retailers don't upgrade their systems.
"We have to improve fraud prevention across the board," he says. "There are people who get up every day across the world with one mission and that's to break credit card technology. But there's no magic pill out there. The solution involves everyone."
Bree Fowler can be reached at http://twitter.com/APBreeFowler