Industrywide, Mallory Duncan, senior vice president and general counsel of The National Retail Federation, said it will cost retailers between $25 billion and $30 billion to switch over to chip-and-PIN technology, mainly because of the cost associated with upgrading sales terminals.
He said the most significant piece of Target's announcement is that it will be including the PIN requirement with its security upgrades. He said this is the fastest, most effective step the industry can take in helping to reduce fraud, as it's a less costly undertaking and still protects consumers.
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By switching over to PINs, and postponing or eliminating the change to chips, the move toward more secure payments would only cost retailers about $4 billion, Duncan said.
"What you want to do is fix the weakest link first, and the weakest link is the signature," Duncan said. "[Target is] leading the charge to fix the weakest link… it's the banks that have to follow suit."
Still, the new technology is not perfect. Many point out that the new point-of-sale terminals only secure in-store transactions, leaving online sales vulnerable. Jason Oxman, CEO of the Electronic Transactions Association, also pointed out that the Target breach affected the retailer's systems that stored card data, so EMV technology would not have stopped it.
Target has been working to restore the confidence of shoppers, who stopped spending—and, in some cases, visiting its stores altogether—following the data breach that affected up to 110 million shoppers.
Last month, a report from Kantar Retail found that only 33 percent of U.S. households shopped at a Target or SuperTarget in January. That was the retailer's lowest level of shopper penetration in the past three years.
The pullback in foot traffic was also reflected in the retailer's fourth-quarter earnings report. The company said its domestic comparable-store sales fell 2.5 percent from the same period a year earlier, and were affected by "meaningfully softer results" following the Dec. 19 news of the data breach.
However, CEO Gregg Steinhafel also said in the release that he was "encouraged that sales trends have improved in recent weeks."
Recent data from YouGov's BrandIndex also indicate that consumers are slowly forgiving the discounter. According to the firm, Target's consumer perception currently stands at 15, after plummeting as low as -35 in wake of the breach. Though the company is still only about halfway back to its pre-breach score of 26, YouGov said it is only several points below what they consider a recovery.
Scores range from 100 to -100 and are calculated by subtracting negative feedback from positive. A score of zero means that a company has received equal positive and negative feedback from respondents. The index interviews 4,300 people each weekday to draw its conclusions.
—By CNBC's Krystina Gustafson; CNBC's Courtney Reagan contributed to this report.