Home improvement retailer Home Depot (HD Quick QuoteHD - Free Report) has filed a lawsuit against both Visa (V Quick QuoteV - Free Report) and MasterCard (MA Quick QuoteMA - Free Report) over credit card security issues it thinks are present. The lawsuit alleges that credit card security is not strong enough, and is putting both retailers and consumers at risk to attacks from hackers.

Home Depot wants both Visa and MasterCard to implement two-factor authentication where a consumer would need to provide a Personal Identification Number in addition to having their card present at the time of a transaction. As it stands now, when a consumer makes a purchase via credit card all they need is a signature for authentication.

Home Depot is not the first to file a lawsuit against one of the credit card companies over a lack of security, as Walmart (WMT Quick QuoteWMT - Free Report) filed a similar lawsuit against Visa last month. Walmart is also in favor of consumers having to enter a PIN for authentication at purchase, as a spokesperson for the company stated shortly after their lawsuit filing, “PIN is the only true secure form of cardholder verification in the marketplace today, and it offers superior security to our customers”.

Both Home Depot and Walmart have had to deal with breaches of security regarding credit card and customer information, and clearly neither wants to be the victim of anymore hacks moving forward. The credit card companies such as Visa and MasterCard believe the new chip cards being sent to customers offer both customers and retailers sufficient protection, but it is yet to be seen whether or not this is the case.

It will be interesting to see how both lawsuits play out in the coming months, and whether or not credit card companies will be required to implement two-factor authentication, or if the new chip cards will continue to be used and be sufficient.  If the new chip cards turn out to be a failure, it could become a massive headache for the credit card companies. There also is the possibility of other retailers like Target (TGT Quick QuoteTGT - Free Report) filing lawsuits, as they, among other retailers, have also been hit with security breaches and could look for change from the credit card companies.

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