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 The order, which Obama signed before a lively, packed crowd of
regulators at the Consumer Financial Protection Bureau, will add
microchips and PIN numbers to government credit cards and debit
cards starting in January.
The president also announced that several major companies will take
steps to make their own systems more secure and offer more customer
protections.
"The idea that somebody halfway around the world could run up
thousands of dollars in charges in your name just because they stole
your number, or because you swiped your card at the wrong place in
the wrong time, that’s infuriating," he said.
Obama's executive order comes after many large companies including
Target <TGT.N>, JPMorgan <JPM.N> and Home Depot <HD.N> have suffered
high-profile cyber security breaches.
The White House said that Home Depot, Target, Walgreen <WAG.N> and
Wal-Mart Stores <WMT.N> will roll out secure chip and PIN-compatible
card terminals in all their stores, most by January.
In addition, American Express <AXP.N> plans to launch a $10 million
program to help small businesses upgrade sale terminals. Visa <V.N>
will invest in education programs about microchips, Mastercard
<MA.N> is offering free online identity theft monitoring and Citi
Cards <C.N> will partner with FICO to make free credit scores
available.
Bank and retail industry groups have been at odds for years over how
to improve the security of electronic payments. The recent data
breaches have made the dispute more prominent.
Banks have wanted retailers to bear more of the costs of replacing
cards after breaches occur, while retailers said banks had been slow
to adopt new technologies.
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But both sides welcomed the news of Obama's executive order. In
statements, the American Bankers Association and the National Retail
Federation each said they supported the measures.
Obama said he hopes Congress will "do its part" and pass cyber
security legislation to create a national standard for handling data
breaches.
Obama signed the executive order at the headquarters of the CFPB,
created by the 2010 Dodd-Frank Wall Street reform law to protect
consumers from predatory lending practices.
After signing the order, he joked that even he recently had his
credit card declined at a New York restaurant.
"It turned out I guess I don't use it enough. So they thought there
was some fraud going on," he said. "Fortunately, Michelle had hers."
Obama has signed a series of other executive orders, such as on
minimum wages and carbon emissions, which, while generally limited
in scope, have been designed to either jumpstart more action or
pressure Congress to act.
(Reporting by Sarah N. Lynch, Steve Holland and Douwe Miedema;
Editing by Lisa Von Ahn and David Gregorio)
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