Sam’s Club credit cards to come with security chip

Sam’s Club, the warehouse club division of Wal-Mart Stores Inc., will begin issuing credit cards embedded with microchips, making the cards more difficult to copy in the wake of data breaches that have swept across the retail industry. The co-branded MasterCard credit cards will be issued beginning later this month.

“This move by Sam’s Club makes them a trailblazer in getting chip cards in the hands of businesses and consumers, and leading the push toward a safer and more secure customer experience,” said Chris McWilton, president North America, MasterCard. “This will no doubt help drive chip-enabled technology forward here in the U.S. as it gains more traction.”

Sam’s Club announced the rollout of the chip-enabled credit cards along with a new cashback program. Parent company Wal-Mart announced in April it had picked MasterCard Inc. to handle transactions for Wal-Mart and Sam’s Club store-branded credit cards. The retailer had partnered with Discover Financial Services since 2005.

Target Corp. is gearing up to have chip-enabled credit and debit cards and terminals at its U.S. stores in September. The retailer has suffered since as many as 70 million customers were affected by a data breach last year.

Target has estimated it will spend $100 million to roll out chip-based credit card technology in its nearly 1,800 stores. The cost of deploying the chip technology, including new registers and back-office systems, has slowed adoption in the United States. Microchip systems are widely used in Canada, Mexico and most of Western Europe.

Visa and MasterCard contend a move away from the black magnetic strips on the backs of credit cards would eliminate a substantial amount of U.S. credit card fraud.

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