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While few senators attended the Senate Banking Committee’s hearing on the effects of consumer finance regulations, Senate Democrats blasted Senate Republicans for trying to kneecap the CFPB and questioned one witness’ judgement about the agency at Tuesday’s event. During his opening statement, ranking member Sherrod Brown (D-Ohio), chided the committee’s Republicans for having forgotten the recent financial crisis and the reasons why the CFPB was developed. He told committee members to resist the collective amnesia in the hearing room and in Congress. Continue Reading
Four out of every five consumers (82%) want to choose what sort of payment technology they can use at the register, according to a new study by Morning Consult. The company surveyed 2,028 registered voters, and 75% said stores should move as quickly as possible to adopt new electronic payment forms that would protect payment information. The respondents also said stores should offer the payment types that customers consider secure (63%) instead of what the retailer wants to use (19%). Continue Reading
Many banks are now issuing customers more secure chip-based credit cards, and most retailers now have card terminals in their checkout lanes that can handle the “dip” of chip-card transactions (as opposed to the usual swipe of the card’s magnetic stripe). But comparatively few retailers actually allow chip transactions: Most are still asking customers to swipe the stripe instead of dip the chip. This post will examine what’s going on here, why so many merchants are holding out on the dip, and where this all leaves consumers. Visa CEO Charles W. Scharf said in an earnings call late last month that more than 750,000 locations representing 17 percent of the U.S. face-to-face card-accepting merchant base are now enabled to handle chip-based transactions, also known as the EMV (“Europay, Mastercard and Visa”) payment standard. Continue Reading
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.
But Sam Fabens, spokesman for the Electronic Payments Coalition, said that while the EMV transition is gradual, it is happening. “There have been more chip cards issued in the U.S. than anywhere in the world,” he said, adding that, “it was designed to be a process.” “In some cases, merchants looked at their risk profile in terms of when to make the transition (to EMV-enabled terminals), and small ones may have decided to wait for natural update,” he said.
Sen. Dick Durbin, D-Ill., slipped into the monstrous 2010 Dodd-Frank financial regulation bill a favor long sought by big-box retailers, such as Wal-Mart. The Durbin amendment, as it is known, imposed price controls on interchange fees for debit cards. Interchange fees are what banks and card issuers charge retailers for processing payments. Many consumers prefer to use cards instead of cash, so it’s advantageous for retailers to provide that as an option.
Parishioners text tithes to their churches. Homeless street vendors carry mobile credit-card readers. Even the Abba Museum, despite being a shrine to the 1970s pop group that wrote “Money, Money, Money,” considers cash so last-century that it does not accept bills and coins. Few places are tilting toward a cashless future as quickly as Sweden, which has become hooked on the convenience of paying by app and plastic.
Christmas is the time for goodies and gifts but lobbyists for the retail industry’s are hoping Congress grants their wish list of crony capitalist giveaways that will cost consumers while increasing their own profit margin. Andrew Langer, the President of the Institute for Liberty, is pulling the alarm on the crony scheme pushed for by lobbyists for the retail industry to impose federal price controls on credit card fees: “Congress should reject European price controls,” that “while America’s regulatory costs have ballooned since 2005, Europe’s have positively skyrocketed. Thankfully, the United States has not copied the statist policies in many European counties that hamper economic growth. But right now, well-funded lobbyists are pushing a European idea that the government should set price controls on payment processing fees. These same lobbyists were successful five years ago in implementing a cap on card swipe fees, yet that was not enough for them. They … Continue reading
Most in politics can understand it when those firmly on the progressive side make the argument that we in America need to enact public policy more like that of Europe. But when one American industry is locked in a battle with another, and seeks to use the force of the federal government to intervene in that fight, Members of Congress should know not to buy that bill of goods when one industry wants the federal government inflicted on another just to increase their bottom line at the expense of the other. Such is the case with the latest push by the retail lobby to enact European type price controls on the interchange fees charges to retailers for accepting debit and credit cards from their customers.
Voters are twice as likely to say that retailers, not financial institutions, are responsible for protecting customers’ data.