Mastercard, likely responding to the huge Target data breach of 2013, is now extending its zero-liability guarantee to PIN-based and ATM transactions.

Currently, zero-liability protection only covers signature based transactions. So, if a customer's PIN number is compromised and is used for unauthorized transactions, they weren't guaranteed that protection.

The move to include PIN-based transactions in the zero-liability protection give Mastercard users an extra level of protection from theft and lost cards. Those with Mastercard debit and check cards will notice the policy change in October.

"The move by MasterCard just enhances the sense of security for people at a time when it has been shaken up significantly in recent times," said Gil Luria, an analyst with Wedbush Securities.

Even if someone loses their ATM card with the Mastercard logo and a thief manages to withdraw money from an ATM machine, the owner will be protected.

Mastercard, which is the second-largest debit and credit card company in the world, behind Visa, is the first to announce this policy. Visa's zero-liability policy continues to be offered only on signature-based transactions and not PIN-based and ATM transactions.

"The changes that we're making in cardholder protection combined with our efforts to move the U.S. payments industry to EMV chip technology will help deliver safer shopping experiences to consumers," said Chris McWilton, president of North American Markets for MasterCard.

Both Visa and Mastercard are urging banks and retailers to add EMV technology to their cards by October 2015. The EMV technology is said to make paying with plastic much safer.

"This all comes back to the adoption of EMV. Of all the cards that are breached at ATMs, a majority of them are non-EMV cards. This is just another way for the company to impress upon the importance of quickly adopting EMV cards," said Philip Philliou, managing partner of Philliou Partners, a firm that helps banks and retailers select payment processors

Another protection that Mastercard announced last week was identity theft resolution assistance. They'll assist customers who have fallen victim to identity theft with canceling cards, alerting credit report agencies and detecting where stolen cards may have been used.

Mastercard said that the financial impact of these new security policies is small.