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The National Retail Federation told Congress Wednesday, Oct. 7, that new chip-and-signature credit cards without a PIN will not stop data breaches, and that small businesses should not be pressured to install the equipment to accept them at the expense of more effective technology.

“The new EMV equipment does not stop breaches,” NRF Senior Vice President for Government Relations David French said. “Indeed, in many cases it provides no significant benefits either to the business or to the business’ regular customers. It is merely an additional expense small businesses are being told to bear.”

If small businesses are pushed to adopt Europay MasterCard Visa technology, alternatives such as near-field communication contactless payment, mobile wallets and other smartphone-based technology “may effectively be locked out of the market,” French said.

“These are important considerations that businesses of all sizes must carefully ponder,” French said. “It would be inappropriate to prejudge their decision-making and stampede businesses into the adoption of solutions less protective for businesses and consumers than what has existed throughout the industrialized world for more than a generation.”

Cards currently being issued by U.S. banks feature a computer microchip that will eventually replace cards’ easily copied magnetic stripe to store data. But French said the cards also need a secure personal identification number, or PIN, which would eventually replace easily forged signatures, as is done in all other countries that use EMV cards. While the chips make the cards more difficult to counterfeit, they do nothing to protect lost or stolen cards, while a PIN alone could prevent both types of fraud, he said.

For the full story, visit NRF.com.