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Target finally implements chip and PIN card protections

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Embattled US big-box retailer Target, still struggling to handle one of the largest and most expensive card heists in history, is implementing chip and PIN payment card systems for its stores.

The company on Tuesday said that it will be working with MasterCard to move all of its REDcard customer cards over to chip and PIN units. The switchover will include customers who use Target's branded credit and debit cards.

The transition for the the new cards is set to kick off in 2015 as the company moves both its branded and co-branded payment cards to the new, more secure format.

"Target has long been an advocate for the widespread adoption of chip-and-PIN card technology," said Target CFO and executive vice president John Mulligan.

"As we aggressively move forward to bring enhanced technology to Target, we believe it is critical that we provide our REDcard guests with the most secure payment product available. This new initiative satisfies that goal.”

By requiring two-factor authentication, chip and PIN cards can help to dramatically reduce the risk of account theft from stolen or cloned cards. Though the format has been found to have its weaknesses, the system is generally considered preferable to simply swiping cards.

Overseeing Target's effort will be Bob DeRodes, Target's new executive vice president and chief information officer. A former adviser for the US Department of Homeland Security, DeRodes was also touted by Target for his past work in helping to secure data for a number of US banks and financial institutions.

The moves come as Target continues to overhaul its security policies in the wake of a security breach which late last year resulted in the loss of roughly 40 million customer payment cards. The breach, which has been traced back to a network intrusion, hit the company at the height of the holiday shopping season.

In subsequent investigations of the incident, researchers suggested that the company ignored the early warning signs of a possible attack, responding only when US government investigators alerted the company of a breach on its systems.

Target said that since the attack it has committed to a $100m overhaul of its payments systems. The company figures to pay even more to settle losses from the incident and cover credit monitoring services for customers whose account information was compromised. ®

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