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Competitive Enterprise Institute |

Interchange Fee Warnings Coming True in EU

We have often warned about the negative effects of interchange fee regulation and specifically a cap on interchange fees. Last year we warned the European Parliament that a proposed EU-wide cap on interchange fees would cause many banks to raise fees and interest rates on all their customers, not just those who use debit or credit cards. We said: Capping interchange fees has been tried in some countries around the world.  Despite claims that these efforts were for the benefit of consumers, the real world results have shown the opposite to be true. In every instance, consumers faced higher fees for banking services, a reduction in benefits and services and saw no return in the form of lower prices from merchants despite promises by merchants and policy makers to pass savings to consumers. We also noted in April that banks were already cutting back on card reward schemes. The negative effects of this arbitrary cap on interchange fees are now being widely felt in Europe and are playing out exactly as we expected. Banks earning less on interest and interchange fees will raise customer fees to compensate for losses in other fields of activity: The first domino to fall was
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Toronto Sun |

Loyalty program critics protect you from yourself

At first blush, you might well wonder why anyone would be against loyalty programs. Whether you earn points by shopping at a particular store or by using a particular credit card, you are rewarded for your loyalty. Maybe you exchange your points for a discount on airfare for a sun-filled vacation. It’s all voluntary, and everyone involved seems to benefit. Yet several interest groups, such as the Public Interest Advocacy Centre, have recently taken aim at loyalty programs. One criticism is that the benefits consumers receive are not worth as much as what the program operators get out of it. Canadian consumers seem to disagree, as 89% of us adhere to at least one loyalty program.
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Electronic Payments Coalition |

EPC Statement on The Data Security Act of 2015 (H.R. 2205) Markup

The recent deluge of data breaches at major retailers around the country has caused millions of consumers’ personal and financial information to be exposed. Thankfully, the House Financial Services Committee today advanced an important piece of legislation that will better protect consumer data by ensuring that retailers are held to common sense data security standards that were adopted by the payments industry years ago. The Data Security Act of 2015 (H.R. 2205) will ensure that retailers adopt scalable, flexible common sense data security standards that protect consumers’ personal and financial information when in the hands of retailers, which is exactly what consumers want. Just this morning, a Morning Consult poll found that 92 percent of voters agree that stores and retailers should adopt the latest technology and best practices to keep Americans secure. The payments industry is constantly working to improve data security through technologies like EMV, tokenization and biometrics and has upheld strong data security standards for consumers for over a decade. Unfortunately, the system is only as strong as its weakest link and retailers have yet to adopt these same common sense standards. This legislation is an important step forward and we thank Reps. Neugebauer, Carney and all of
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Electronic Payments Coalition |

EPC Statement on House Energy and Commerce Mobile Payments Hearing

Today the House of Representatives Committee on Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade held a hearing to discuss the mobile payments landscape. Mobile payment solutions, such as Apple Pay, Samsung Pay and others increase security, competition and consumer choice. For years the payments industry has been a leader in mobile payments and has worked with cross-industry partners to introduce new payments methods and develop security solutions that work across a wide range of platforms. These security solutions include more secure ways to verify your identity, such as biometrics, and to make the data you transmit less valuable, with technology like encryption and tokenization. While mobile payments greatly enhance our ability to protect transactions, we also need common sense data security standards that will help ensure that retailers, financial institutions and networks treat consumers’ financial data with care. More information is available at www.electronicpaymentscoalition.org. ### About the Electronic Payments Coalition The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC
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Electronic Payments Coalition |

EPC Statement on Attorneys General Chip and PIN Letter

Today a small number of Attorneys General signed onto a letter regarding chip and PIN. Contrary to the claims of a small group of retailer trade associations, PIN would have done nothing to prevent the breaches at Target, Home Depot, Michael’s and other retailers.  This campaign to mandate PIN is an attempt to prevent the adoption of common sense data security standards, which could protect consumers by preventing hackers from stealing data from big box retailers. Securing the payments system requires multi-layered security solutions, including chip cards, tokenization, biometrics and encryption that devalue data and protect consumers from fraud.  Instead of investing in this misguided campaign, retailer associations should work with their members to adopt these valuable data security solutions that the payments industry has committed to implementing. More information is available at www.electronicpaymentscoalition.org. ### About the Electronic Payments Coalition The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers and the media on the system’s role in economic
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Electronic Payments Coalition |

Electronic Payments Coalition Calls on Retailers to Adopt Common Sense Security Standards

Today, the U.S. House Small Business Committee will hold the second part of a hearing entitled “The EMV Deadline and What it Means for Small Businesses,” which will address payment security in the United States. “Instead of providing Congress with useful information about how to help small businesses protect consumer data, large national retail associations are using this hearing to push for a ‘security’ solution – PIN – that wouldn’t have done anything to stop the breaches at Target, Home Depot or Michaels,” said Sam Fabens, spokesperson for the Electronic Payments Coalition PIN is a static data element that would not have a meaningful impact on overall payments fraud and retailers are simply using it to distract from the fact that they don’t have to abide by any security standards, which leaves consumers’ personal and financial information vulnerable. “The payments industry adopted common sense data security standards over a decade ago,” said Fabens. “Today’s hearing is an opportunity for members of this committee to ask why merchants have resisted adopting the same safeguards.” The migration to EMV chip cards and the activation of chip readers by merchants is a critical step in further improving consumer protection. We’ve already seen tremendous
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Electronic Payments Coalition |

Electronic Payments Coalition Applauds Congressman Luetkemeyer for Supporting Common Sense Security Standards for All

  Consumer data protection is a major concern for Americans, particularly given the recent spate of large scale retailer data breaches. As such, it is increasingly important that Congress identify common sense security solutions to protect consumers’ personal and financial information. In an effort to advance this cause, Congressman Luetkemeyer announced his support today for the Data Security Act of 2015. “Consumers deserve to know that their information is safe in the hands of retailers,” said Sam Fabens, spokesperson for the Electronic Payments Coalition. “We applaud Congressman Luetkemeyer for supporting this important piece of legislation and hope that it will encourage others in Congress to follow suit.” Financial institutions of all sizes are already required by the Gramm-Leach-Bliley Act (GLBA) to develop and maintain robust internal protections to combat and address network intrusions and data theft. Despite millions of consumers having their data exposed in retailer data breaches, the retail industry has actively opposed adopting similar standards. “Data security should be a shared responsibility by all participants in the payments ecosystem,” said Fabens. “We urge Congress to support H.R. 2205, ‘The Data Security Act of 2015,’ to help ensure that consumers’ personal and financial information is protected.” More information is
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FBI |

FBI Issues PSA on EMV Cards

By October 2015, many U.S. banks will have replaced hundreds of millions of traditional credit and debit cards, which rely on data stored on magnetic strips, with new payment cards containing a microchip known as an EMV chip. While EMV cards offer enhanced security, the FBI is warning law enforcement, merchants, and the general public that no one technology eliminates fraud and cybercriminals will continue to look for opportunities to steal payment information. TECHNICAL DETAILS What is an EMV credit card? EMV Chip The small gold chip found in many credit cards is most often referred to as an EMV chip. Cards containing this chip are known as EMV cards, as well as “chip-and-signature,” “chip-and-pin,” or “smart” cards. The name “EMV” refers to the three originators of chip-enabled cards: Europay, MasterCard, and Visa. EMV chips are now the global standard for credit card security. With traditional credit cards, the magnetic strip on the back of the card contains static personal information about the cardholder. This information is used to authenticate the card at the point of sale (PoS) terminal, before the purchase is authorized. When a consumer uses an EMV card at a chip PoS terminal, that transaction is protected
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Electronic Payments Coalition |

U.S. House Small Business Committee: Small Business Owners Start Adopting New EMV Payment Card Technology

Today, the U.S. House Small Business Committee will hold a hearing entitled “The EMV Deadline and What it Means for Small Businesses,” which will discuss the adoption of EMV technology by U.S. small business owners. EMV microchips use a unique one-time code to authenticate debit and credit card transactions, making it nearly impossible for encrypted data to be used to conduct counterfeit fraud. “With nearly 60 percent of U.S. consumers claiming to have at least one chip-enabled card in their wallet, the United States is already the largest chip card market in the world.  Chip-enabled devices are already in use at more than 300,000 merchant locations, representing a 547 percent year-over-year increase. In fact, small businesses accounted for about half of chip payment volume last month. “Last week, the Payment Security Task Force’s eight financial institutions said in a statement that 30 percent of their customers’ credit and debit cards were chip-enabled as of the end of June, a number expected to grow to 60 percent by the end of the year and 98 percent by the end of 2017. “We’re making tremendous progress in helping ensure consumers are protected in the digital age. For momentum to continue in consumers’
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Four Years Later, Consumers Aren’t Seeing Savings Promised by Retailers From the Durbin Amendment

Four Years Later, Consumers Aren’t Seeing Savings Promised by Retailers From the Durbin Amendment WASHINGTON, DC – October 1, 2015 marks the fourth anniversary of the Durbin amendment’s implementation, but consumers aren’t celebrating. Once again, a new survey shows at least 92 percent of shoppers in each of the 15 categories measured reported that prices have increased or remained the same over the past year. This survey provides additional evidence that despite retailer promises that they would lower prices after realizing savings from the amendment – savings that now total over $32 billion – consumers generally have not seen savings. This survey, conducted in September 2015 by Phoenix Marketing International and sponsored by the Electronic Payments Coalition, asked nearly 2,000 consumers about price changes they have observed at a variety of retailers. The survey found continued evidence that most shoppers are not experiencing a price decrease at the point-of-sale. Supermarket shoppers were the most likely to report price increases – with 72 percent saying that supermarket prices have increased over the past year. Other categories with more than half of consumers reporting price increases included restaurants and drug stores or pharmacies. “In each of the 15 categories measured, less than 10
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