Pressure increases on banks to adopt chip-and-PIN

The biggest financial institutions in the U.S. are under renewed pressure to mandate the use of PINs with new chip-based payment cards.

On Monday, the attorneys general of eight states and the District of Columbia sent a joint letter to the companies, urging them to adopt the technology as a way to reduce the effectiveness of data breaches and card fraud.

Banks have issued millions of chip-based cards this year, bringing the U.S. belatedly in line with most of the rest of world, but while other countries switched to PINs as they introduced the cards, the U.S. has stuck with signatures as a second form of identification.

The new cards electronically transmit one-time codes instead of card numbers when customers pay. That eliminates the risk of data breaches from malware in store systems like those that hit millions of customers at Target and Home Depot, but it doesn't stop fraudulent in-store transactions from taking place.

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