Target ready for EMV, educating customers

Target (NYSE:TGT) is ready for the EMV chip card transition, and will use chip-and-PIN authentication on its store-brand REDcards, according to the company's A Bullseye View blog. 

"We just finished setting up all of our Target stores to accept third-party chip cards at checkout," the company's blog post reads. "Our teams have been working for years to bring guests this secure payment technology, and we're excited to be among retailers leading the industry in bringing it to the U.S." The blog post includes a one-minute video showing consumers how EMV works.

The "A New Way to Pay" video says the cards include smart chips that help keep payment information secure and make the card difficult to counterfeit.

"If you have a Target REDcard, we'll be replacing your existing card with a chip card that requires a PIN. That way, you'll have the data security of the chip and better protection against the unauthorized use of a lost or stolen card in our stores," according to the video. This is noteworthy because the major credit card companies are pushing chip-and-signature authentication, which many retailers—and the Federal Reserve—say is less secure than chip-and-PIN.

The video also describes the major change with EMV at the point-of-sale, where the card has to remain in the terminal until the transaction is complete. Many see this as the biggest adjustment shoppers will have to make in using the chip cards instead of the traditional, chip-less credit and debit cards. "When your transaction is complete, the card reader will let you know you can remove the card," the video explains.

"So now when you shop at Target, you can use the chip in your card knowing your payment information is more secure. In the end, it's a small change that brings big peace of mind," the video concludes.

The blog post contains a link to frequently asked questions about EMV chip cards, but addresses several issues on the blog post itself.

For example, the post explains how consumers can tell if they have a chip card. "Look for the chip—it's a little gold or silver square on the front of your card," and then explains how to use the card, emphasizing that the card must be left in the reader until the shopper is prompted to remove it.

The various verification methods for different cards are explained, along with the continuation of magnetic stripes on the cards. "With some cards, you'll enter a PIN to authenticate the transaction. With others, you'll be prompted for your signature on the screen. (Sometimes, your transaction total may not require a PIN or signature). And don't worry, Target still accepts cards without chips—just swipe the magnetic stripe like always. We'll continue to accept all card tenders we have in the past."

The post also explains how Target REDcards will transition to chip cards. "We've teamed up with production vendor Gemalto to replace our credit and debit REDcards between now and next spring with chip-and-PIN cards. So if you're a REDcard guest, you'll get a new, chip-enabled card in the coming months. Until then, keep using your REDcard just as you do today."

The chip card technology is also briefly explained. "The card reader interacts with the chip instead of reading any information off a magnetic stripe. The chip validates your card is authentic and ensures a secure transaction. The PIN or signature verifies you as the owner. And chip cards are nearly impossible to clone. These extra security features help protect you against fraud."

Target employees will be among the first to get chip-enabled REDcards, so they get training and experience in using the cards. Then, the associates can explain the chip cards to customers.

For more:
-See this A Bullseye View blog post
-See this transcription of the Target video
-See this FAQ about EMV chip cards

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