US ,Hackers Force Retailers and Bankers to Partner on Cybersecurity

In the wake of continued theft of customer data, a coalition of trade associations representing the merchant and financial services industries announced a new cybersecurity partnership that will explore paths to increased information sharing, better card security technology, and maintaining the trust of customers.

Discussion regarding the partnership was initiated by the Retail Industry Leaders Association (RILA) which represents more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

RILA is the trade association of the world’s largest and most innovative retail companies, including Cabela’s, Dick’s Sporting Goods, Foot Locker Inc., Nike, REI, Payless Shoe Source, Sears Holdings, TJX Companies, VF Corp. and Walmart Stores Inc.

“Retailers place extraordinarily high priority on protecting customers’ personal information,” said Sandy Kennedy, President of RILA. “This partnership will improve collaboration across the payments ecosystem allowing us to work together to develop near- and long-term solutions that will enhance security for our customers.”

James Aramanda, president and CEO of The Clearing House Association and Payments Company, urged more proactive efforts such as its Secure Cloud tokenization initiative, which protects consumer credentials.

"Cybercriminals are becoming more sophisticated, and recent events underscore the urgency to update the payments system and protect customers against recent and future threats,” said Aramanda.

Payments occur in an ecosystem of retailers, banks, card companies, processors, security and technology vendors and others. The ecosystem operates best when cyber threats are addressed collaboratively and each stakeholder does all it can to reasonably ensure the defenses of their internal systems are as robust and resilient as possible. The partnership will encourage collaboration across the industries, focused on the following principles:

However, the coaltion will require cooperation between retailers and bankers who have been locked in a fierce battle over how much banks should be allowed to charge retailers every time a customer swipes their credit card.

“This partnership is a positive step in the right direction, since there is no single solution to the complex issues surrounding cyber security," said National Retail Federation President and CEO Matt Shay, who has argued banks are gouging consumers and retailers with their swipe fees. "That is why it is important to bring stakeholders together as we seek answers, share solutions and implement programs that not only prevent hackers from breaching data systems, but protects the consumer by shutting down these criminal enterprises.”

Frank Keating, president and CEO of the American Bankers Association, said the initiative marks a positive first step toward addressing what has emerged as one of the largest threats to retailers.

"Consumers expect both that the payments system will protect their sensitive information, and that they receive the convenience they’ve come to expect while using their credit or debit cards,” Keating said. “With all stakeholders at the table – including community banks, large banks, networks and retailers – we have a real opportunity to find solutions and continuing opportunities to meet the threats posed by cyber thieves.”

• Information sharing is paramount to warding off cyber attacks and protecting data. We are stronger together than divided and must warn each other about cyber threats being waged against all our defenses. The financial services industry has a robust information-sharing mechanism through the Financial Services Information Sharing and Analysis Center (FS-ISAC) that could serve as a forum or model for further information sharing across sectors.
• Other innovative technologies must be implemented, such as systems that will transmit payment data in a way that is unique and dynamic to reduce the risks. Ongoing innovation will be needed to outpace the threats.
• We must forge partnerships among all stakeholders of the payments ecosystem to collaborate on long-term, comprehensive solutions to the threats that are growing to card-not-present situations and the mobile environment.

The participating trade associations will form working groups made up of themselves, member companies, and other stakeholders. The working groups will be focused on increasing threat information sharing, innovative technologies that adds safeguards to protect consumers within the payment system and other areas like national data breach laws. While this forum will serve as an effective way for the industries to discuss areas of agreement, equally important, this forum will be a platform to discuss areas of disagreement and seek solutions.

By press release