MN company works toward better credit card security

MINNETONKA, Minn. – Datacard Group is poised to enter 2014 as a bigger company at a time when its products are in high demand. The Group makes and markets highly sophisticated electronic card devices.

Datacard Group will be moving its long-time headquarters from Bren Road in Minnetonka to Shakopee and is acquiring Entrust of Dallas, Texas and Ottawa, Canada. The expansion will bring the workforce at Datacard up to approximately 2,000. In addition, the firm is looking to hire engineers and marketers. The move to Shakopee is to locate in a larger building.

"In the security arena, we are always going to be chasing the bad guy," explained Russell St. John, Senior Vice President of Global Marketing. "The technology is changing quite rapidly."

The "bad guys" in many cases in the new millennium are cyber thieves, whose aim is to purloin customers' identities and bank information from retail credit and debit card purchases. The most recent case is the debacle at Target Stores that potentially affected 40 million customers.

The technology probed by the thieves in that case involved cards with information on magnetic stripes on the back of the cards. Datacard is marketing newer "smart card" technology.

"In Europe, over 20 years ago, they adopted this thing called a smart chip," said St. John. "It goes on a card…It has a small gold square on it which is basically a computer right on your chip, highly encrypted and highly secure. Banks are adopting it as we speak. Mastercard and Visa have asked the banks to adopt it by 2015.

"The difficulty of putting the data into the chip and reading the data is much higher in the smart card, a much higher level of sophistication and technology in terms of what you need to do to read and encode."

Converting the card economy to smart cards will require replacing the stripe readers with smart card readers. While a customer simply swipes a magnetic stripe through a slot in a store check-out, the smart card is inserted into a machine, just as a card is inserted into an ATM machine.

St. John held a smart card at the company headquarters showing the computer chip on the front and a magnetic stripe on the back.

"Because of the infrastructure change," said St. John. "Not every store, not every bank, not every retailer will have the smart card technology right away. This helps you get through the transition, but I can imagine, years from now, that this (the stripe) will go away. Until the entire infrastructure is changed, you will need both."

Datacard also makes and markets a desktop-sized device that banks are beginning to use to produce or replace customers' credit cards.

"If a card has been taken from a consumer or you have lost your card, you walk into a bank branch and get an immediate replacement card, a permanent card, on the spot in less than 5 minutes from your bank," explained St. John.

Could smart card technology have prevented the problems at Target in December?

"It would help," said St. John. "The technology in a smart card is better than the technology in a mag stripe. Our job at Datacard is to bring a portfolio technology, enable our customers to fight the bad guy. The smart card is the next step in the transition and adoption of better security."


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