We've noted that chip-and-PIN smartcard technology has not really taken off with banks, despite some obvious security advantages. But are we at an inflection point?

Wal-Mart is reportedly planning on making all its payment terminals in the U.S. compliant with a smartcard-based credit card (credit card news) technology that is widely used around the world but isn't common in the U.S. Given the retailers heft, this just might prompt banks to finally embrace the technology.

Banks have had reason to stick with the old magnetic stripe technology for several reasons, one of which has to do with the ultimate liability. Some have argued that because card issuers are not liable for losses that stem from their use of static cards (which are much cheaper than smartcards), they have chosen not to embrace chip-and-PIN. Another issue is the cost of conversion.

Of course, the new terminals to be installed at Wal-Mart will not be of any use if banks decide not to upgrade. We may see some coordinated activity and timetable soon. For security reasons, U.S. banks may not be able to stick with the old technology for much longer. That said, the industry has already invested in safer magnetic stripes, so the decision is not straightforward. 

For more:
- here's a ComputerWorld article

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