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While more secure, Chip and PIN technology is costly

A shopping cart sits in the parking lot of a Sam's Club store

Sam’s Club, the warehouse chain owned by Walmart, is unveiling credit cards with chip-enabled safety technology. In fact, they’re declaring themselves the first mass retailer to do so in the U.S. The cards will be co-branded with MasterCard.

Chip and PIN technology is more secure than the magnetic strip on the back of many cards. Target learned that the hard way when it was hacked last year.

Carl Howe, vice president of research and data sciences at Yankee Group, says the biggest obstacle to adopting chip-enabled technology in the U.S. has been cost, including the price tag for overhauling all those point of sale devices where we swipe our cards now.

“Those are expensive devices -- a few thousand dollars each -- and they have a lot of them,” he says. “And there’s all the backend programming that’s required for it too. So this is not a small move, it takes a lot of infrastructure to make this work.”

Still, credit card companies want all retailers to follow Sam’s Club’s lead and adopt the technology by late 2015. 

About the author

Kate Davidson is a regular contributor to Marketplace.

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