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Financial Institutions Still Trusted to Innovate and Protect Payments, but Retailers Must Do More

Electronic Payments Coalition | April 23, 2018

Voters still trust financial institutions over retailers to develop new payment technologies and safeguard personal information during the checkout process, according to new Morning Consult survey data.

In fact, a strong majority of voters expect retailers to step up when it comes to payments. Four in five voters agree that stores should update their technologies to ensure customers have a range of payment options at the register and that retailers should share in the infrastructure fees that make electronic payments possible.

“Financial institutions continue to develop new technologies to make electronic payments quicker, safer, and more convenient—all of which make retailers’ and consumers’ lives better,” said Jeff Tassey, chairman of the board of the Electronic Payments Coalition (EPC). “However, the onus is on retailers to step up and protect their customers at the checkout. As the recent data breach at Lord & Taylor showed, retailers must be proactive and do their fair share by updating their technology and safeguarding sensitive payment card information.”

Since November 2017, retailers have seen a 15 percent drop in voter trust when it comes to payment technology innovation. Meanwhile, at least 70 percent of voters trust banks, credit unions, credit card companies, and other financial institutions to innovate payment technology, with 1 in 2 trusting these entities the most.

These institutions also rank higher than big-box retailers and smaller businesses, both in store and online, when it comes to trust in protecting payment card information. That’s no surprise, as retailers are not subject to federal data security standards and have seen several breaches in recent weeks, including those at Best Buy, Kmart, Panera Bread, and Lord & Taylor.

“As the number of retail breaches continues to rise, more and more consumers have had financial data compromised and their lives upended,” said Tassey. “To combat this, financial institutions go beyond their federal requirements to protect consumers. This is likely why voters trust them to lead the way on all types of innovation. Retailers, a major part of the payments ecosystem, must join this fight against fraud and begin prioritizing the development and implementation of new technologies to better protect consumers.”

To view EPC’s infographic on the polling, click here.

Morning Consult, on behalf of the Electronic Payments Coalition, conducted an online survey of 1,994 registered voters from April 4-6, 2018. Results from the full survey have a margin of error of +/- 2 percent.

Press Releases/Statements Credit Card Fraud, Data Security, EMV, Payment Technology
Op-Ed: National data security standards are better than PIN

The Hill | March 2, 2018

The National Retail Federation (NRF) has launched an ad campaign to advocate for “uniform national” data breach standards for “all affected industries.”

Welcome to the cause. The financial services industry already is subject to uniform standards and continually has fought for national rules to cover all affected industries.

Retailers opposed these efforts. Instead groups like the Retail Industry Leaders Association push lawmakers and regulators to instead adopt a government mandate that would cost billions to implement and do little to protect consumers.

Barclays of London introduced Personal Identification Numbers (PINs) in 1967, the year the Beatles and Monkees battled for the top of the charts. That music is timeless. PIN is not. Because PINs are a static data element, they don’t protect against counterfeit or card not present (CNP) fraud, which together account for about 85 percent of total U.S. card fraud.

According to the Aite Group, it would cost retailers $4 billion to fully implement PIN. That expense would be worthy if it adequately protected consumers, but it wouldn’t. In fact, an Aite analyst concluded mandating PIN would be “difficult to justify.”

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Op-Ed Consumer Harm, Credit Card Fraud, Data Security, EMV, Payment Technology
New Video: Electronic Payments 101

Electronic Payments Coalition | March 1, 2018

General Credit Card Fraud, Data Security, EMV, Interchange Fees, Payment Technology
Eric O’Neill: Security Must Evolve to Keep Consumers Safe From Credit Card Fraud

Prairie State Wire | February 8, 2018

Cash is no longer king in today’s commercial world. Credit and debit card payments have exploded in the last decade as the preferred method of payment for transactions worldwide. And with this drastic shift, banks and retailers must ensure consumer data is protected at all stages of transactions.

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What Others Are Saying Consumer Harm, Data Security
CEI: No More Free Checking for the Poor

Competitive Enterprise Institute | January 29, 2018

The Durbin Amendment strikes again. Today brings further evidence that the little-known amendment to the Dodd-Frank Act of 2010 by Sen. Richard Durbin (D-IL), which imposed price controls on debit card fees, has stripped access to financial services for the less affluent.

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What Others Are Saying Durbin Amendment
EPC Congratulates Executive Director Molly Wilkinson on New Role

Electronic Payments Coalition | January 19, 2018

The Electronic Payments Coalition (EPC) announced today that Molly Wilkinson has resigned as Executive Director and accepted the position of Vice President of Regulatory Affairs for American Airlines.

Ms. Wilkinson joined EPC in June 2015 after serving as Senior Vice President of Regulatory Policy at Regions Financial Corporation and Executive Director of the Card Policy Council at American Bankers Association. She had a 22-year career in government service beginning at the New York State Legislature as a Research Assistant and concluding as the General Counsel for U.S. Senate Homeland Security & Governmental Affairs Committee for Ranking Member Senator Susan M. Collins.

During Ms. Wilkinson’s tenure, EPC led the fight for repeal of the Durbin amendment, which successfully passed out of the House Financial Services Committee (HFSC) in back-to-back Congresses as part of the CHOICE Act. Throughout this time, EPC rolled out a full-force campaign to highlight the policy’s failures to policymakers, consumers, and small businesses.

Representative Blaine Luetkemeyer, who championed the repeal of the Durbin amendment during the 115th Congress said, “Community banks and financial institutions continue to be hurt by the Durbin amendment’s price controls, but it’s not just banks that are hurt. It’s also low-income consumers who face increasing account fees and fewer rewards. I thank Molly for her leadership and EPC for all their hard work in the fight for repeal. I remain committed to repealing this harmful law.”

“Molly is an exceptional leader that knows how to get things done,” said Representative Ted Budd. “Her leadership brought the Electronic Payments Coalition tremendous success, and I know that she’s going to achieve the same level of excellence at American Airlines.”

“We’re excited for Molly and want to thank her for all she’s done over the past couple of years to advance the payments industry,” said Aaron Stetter of the Independent Community Bankers of America (ICBA) and immediate past EPC Board Chairman. “Under her leadership, we’ve had tremendous success demonstrating to Congress the Durbin amendment’s failures for consumers.”

“It’s been an honor to work on behalf of community banks, credit unions, and financial institutions to bring attention to a policy that has failed consumers for far too long,” said Wilkinson. “We’ve made great progress and EPC will continue to work to end this crony handout to retailers.”

To learn more about EPC, click here.

Press Releases/Statements
Op-Ed: New Report Shows Benefits Of Payments Innovation

Morning Consult | December 5, 2017

We have officially entered retailers’ favorite time of year: holiday shopping season. The next month should be joyful — but it might not be for consumers. Imagine unwrapping a notice that says your payment card was compromised at one of the dozens of merchants you visited on Black Friday or Cyber Monday.

It’s becoming a more frequent occurrence, and even though banks and credit unions typically make consumers financially whole for fraudulent transactions that result from a retailer breach, individuals are still deeply affected, spending hundreds of dollars to keep fraudsters from wreaking havoc on their credit history months, or even years, later.

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Op-Ed Credit Card Fraud, Data Security, EMV
Op-Ed: Retailers Want to Turn Page on Durbin to Escape Accountability for Its Failures

Morning Consult | November 16, 2017

As I read a recent op-ed regarding debit interchange price controls and a possible expansion to credit, I nearly spit out my coffee astonished by retailers’ misrepresentation of the state of play on the issue. In the desperate hope of turning the page, they are calling for Congress and this administration to double down on an anti-free market policy that has hurt low-income consumers, small businesses and small financial institutions — all while enriching retail behemoths. But to splash cold water on the delusions of big retailers, it’s not going to happen.

As the old saying goes, “fool me once shame on you, fool me twice shame on me.” In 2010, corporate retailers persuaded Sen. Richard Durbin (D-Ill.) to add an amendment to the Dodd-Frank Act, at the last moment with little scrutiny and debate. The provision, known today as the Durbin Amendment, capped interchange fees with the promise that it would lead to a level playing field for smaller retailers and save consumers on the goods they purchased.

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Op-Ed Consumer Harm, Durbin Amendment, Interchange Fees, Small Business Harm
New Report Demonstrates Need for Choice and Innovation in Order to Prevent Payment Fraud

Electronic Payments Coalition | November 15, 2017

Today, the Electronic Payments Coalition (EPC) released a report that found multiple dynamic fraud technologies are necessary to combat payment-card fraud.

EPC analyzed information from 20 countries that have varying levels of EMV adoption and use a mix of PIN and signature authentication. EPC found that chip-enabled smartcards—also known as chip cards—have dramatically reduced counterfeit card fraud. In countries where chip cards comprise at least 75 percent of payment cards, counterfeit fraud has declined by 84 percent over the last 11 years—even as the number of in-store transactions has increased 21-fold.

The report also examined the use of PIN and signature authentication, with research showing “there is no clear relationship between total card fraud and a country’s preference for using signatures or PINs” in conjunction with payment cards. This point emphasizes the need for choice—and not a government mandate—when it comes to payment-card security.

“This report confirms what we’ve said all along: You can’t rely on a single security technology to effectively protect consumers. Everyone involved in these transactions—customers, retailers, banks, and processors—must work together to prevent future data breaches and stop increasingly sophisticated criminals from stealing sensitive financial information,” said Molly Wilkinson, executive director of EPC. “Polling shows consumers trust financial institutions more than anyone else involved to develop new technologies to protect their financial data, but everyone in the payment system should be responsible for implementing these new tools and protocols. This includes retailers, who are not currently held to similar standards as financial institutions like banks and credit unions.”

This research demonstrates a one-size-fits-all approach is not the solution for data security and underscores the importance of innovation like tokenization and biometrics. In fact, seven in ten voters agree and say it is likely a more secure way to pay for goods will be introduced over the next few years, according to recent Morning Consult survey data.

Banks, credit unions, and other financial institutions are investing millions of dollars in new technology in order to better protect consumers from data breaches that compromise their sensitive information. Four times as many voters trust financial institutions over retail stores to develop new, more secure payment technologies, according to the same Morning Consult poll.

With technology constantly improving to stay ahead of evolving criminals, EPC urges the government to support a dynamic data security strategy which relies on several tools to protect consumers and authenticate payments. Mandating one static technology, such as PIN, is a disservice to consumers who deserve access to the latest innovations and value their ability to choose how they pay.

To view the full study, click here.

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Press Releases/Statements Consumer Harm, Credit Card Fraud, Cybersecurity, Data Security, EMV, Payment Technology
EPC Statement on Chairman Hensarling Not Seeking Re-Election

Electronic Payments Coalition | October 31, 2017

The following statement can be attributed to Molly Wilkinson, executive director of the Electronic Payments Coalition (EPC), in response to House Financial Services Committee (HFSC) Chairman Hensarling’s announcement that he will not seek re-election in 2018.

“EPC congratulates Chairman Hensarling on a long, successful career in Congress, and thanks him for his service to our country. In his more than fourteen years as congressman, including more than four years as Chairman of the House Financial Services Committee, he has repeatedly stood up for consumers and the free market. As Chairman, he continuously demonstrated his principled commitment to ending the Durbin amendment’s harmful price controls, leading his committee to vote twice in favor of repealing the provision and speaking out on its negative consequences. It is important that members of Congress stand up for what is right, especially given the mounting evidence that shows the Durbin amendment is a failure. Chairman Hensarling has consistently fought in defense of consumers, small businesses, credit unions, and community banks, and we hope others in Congress will do the same in years to come.”

Press Releases/Statements Durbin Amendment, The Financial CHOICE Act

Resources

Viewing results for:

Financial Institutions Still Trusted to Innovate and Protect Payments, but Retailers Must Do More

Op-Ed: National data security standards are better than PIN

New Video: Electronic Payments 101

Eric O’Neill: Security Must Evolve to Keep Consumers Safe From Credit Card Fraud

CEI: No More Free Checking for the Poor

EPC Congratulates Executive Director Molly Wilkinson on New Role

Op-Ed: New Report Shows Benefits Of Payments Innovation

Op-Ed: Retailers Want to Turn Page on Durbin to Escape Accountability for Its Failures

New Report Demonstrates Need for Choice and Innovation in Order to Prevent Payment Fraud

EPC Statement on Chairman Hensarling Not Seeking Re-Election

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