The two industries have long been at odds over who takes the blame and bears the costs associated with cyber attacks.

The recent Target hack has already cost banks over $172 million in re-issued cards and a recent analysis by Jefferies suggested that the retailer could be on the receiving end of a $1 billion breach bill from the payment industry.

The National Association of Federal Credit Unions recently urged Congress to crack down on data security weaknesses among merchants, arguing that its members are picking up the tab for poor standards.

However, the two sides are now stepping up cooperation efforts through a partnership involving 14 trade associations, led by the Retail Industry Leaders Association and the Financial Services Roundtable.

In a statement, the group say that the payments ecosystem operates best when cyber threats are tackled collaboratively, with retailers, banks, card companies, processors, and security and technology vendors sharing information to ward off attacks and protect data.

The partners also insist that "innovative technologies must be implemented, such as systems that will transmit payment data in a way that is unique and dynamic to reduce the risks".

Camden Fine, president and CEO, Independent Community Bankers of America, says: "Data protection is a shared responsibility of everyone involved in the payments processing chain. Consumer confidence in the payments system is vital for retailers, networks, processors, telecom providers, and card issuers and is at the heart of the customer-bank relationship."

The associations will now set up various working groups to focus on areas such as increasing threat information sharing, innovative technologies, and national data breach laws.