Target Corp. Chief Executive Gregg Steinhafel is calling on retailers and banks to adopt chip-based credit-card technology to better protect shoppers. But the debate was different a decade ago, when the executive was on the other side of the issue as Target pulled the plug on a $40 million, three-year program that did just that.

Chip-based credit cards—in which a smart chip in the card works with special readers installed at stores—are widely used in Europe and Canada, making it more difficult for thieves to profit from the...