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Will ATM machines soon be able to identify you by your eyes? Citigroup Inc. is testing new technology with automated-teller-machine maker DieboldInc. that would allow customers to withdraw money with an eyeball scan or a code on a smartphone instead of a card swipe. The new technology, set to be announced by Diebold on Monday, is the latest foray by big banks to find easier, more secure ways for consumers to access their cash than the ATM card, a staple in consumers’ wallets for decades.
Retailers who thought the roar surrounding EMV would reach a lull after Oct. 1 are in for a bit of a rude awakening. After all, there’s still work to be done. In the second day of hearings for the U.S. House Small Business Committee on Oct. 21, experts from the Electronic Payments Coalition traded opinions with legislators on how best to approach the issue of payment security. In a statement to the committee, Sam Fabens, spokesperson for the EPC, claimed that large retailers aren’t doing all they could be doing to help their smaller counterparts.
The Electronic Payments Coalition has publicly commended the FBI’s recent public service announcement (PSA) about the EMV policy shift underway in the US. The shift is essentially putting EMV chip cards into the hands of American consumers as the country’s regulatory framework shifts to incentivize their use, since the EMV chip cards’ automatically generated one-time codes for transaction authentication add an important extra layer of security to transactions. While EMV chip cards are undeniably more secure than traditional magnetic strip cards, the FBI’s PSA focused on the security risks that are nevertheless present in the new technology. That’s fine with the Electronic Payments Coalition, which has issued a statement in which it uses the FBI’s PSA as an opportunity to highlight the advantages of EMV chip security while warning against consumer complacence when it comes to security. The EPC notes that in other countries where EMV chip cards have been … Continue reading
The FBI went back and forth Thursday, Friday and Saturday on a public service announcement about the security of new chip cards under the so-called EMV migration — issuing, then revoking and finally revising a PSA that originally made retailers happy but prompted complaints from the financial services industry. The bureau’s initial version included lines such as “When using the EMV card at a PoS terminal, consumers should use the PIN, instead of a signature, to verify the transaction” — erroneous advice, since consumers in the U.S. generally don’t have the option of using PINs for credit card transactions. Brian Dodge, executive vice president of the Retail Industry Leaders Association, said the original language “should be a wake-up call to the banks and card networks that continue to stand in the way of making PIN authentication the standard in the U.S.” By Saturday, after the FBI had deleted the line … Continue reading
The Great Recession devastated the American economy and disrupted the lives of millions of Americans who were laid off or lost their homes to foreclosure. In an effort to promote economic recovery and ward off another financial crisis, Congress passed legislation to reform the financial system and establish safeguards for American consumers. By many measures, the economy is now recovering, but a recent paper based on the congressional testimony of a law professor at George Mason University argues that the financial reform legislation is actually hampering economic growth. Todd Zywicki maintains in his recent paper summarizing testimony given to the U.S. House of Representatives Financial Services Committee that, five years after its enactment, the recession-responsive legislation is failing to achieve its goal of protecting consumers and investors. He contends that several pieces of financial reform legislation are increasing inflation, reducing consumer choice, and limiting millions of Americans’ access to credit. … Continue reading
When U.S. Sen. Dick Durbin persuaded Congress to cap the fees retailers pay for debit card processing, he promised the retailers would pass the savings on to consumers. Studies have shown they haven’t, and four years later, bankers and others say the Durbin amendment, passed as part of the Dodd-Frank financial reform law, is an abject failure.
It is sometimes said that the definition of a true compromise is one in which neither party is really happy about the end result. If you accept that definition, perhaps the Durbin Amendment represents the ultimate compromise. The Durbin Amendment, a last-minute provision of Dodd-Frank Act, put a cap on the fees banks over $10 billion in assets could collect on debit card transactions – or rather, it directed the Federal Reserve to regulate that matter. But the cap on interchange fees was supposed to make up for it, at least to consumers, by enabling merchants to lower their prices because they would save a bundle on swipe fees. Not so much. According to a recent study out of the Federal Reserve Bank of Richmond, the Durbin Amendment resulted in neither cost savings to consumers, nor (interestingly enough) savings to merchants. “We were saying this back when this was first … Continue reading
He said the 2,300 page-long legislation shows an experiment stumbling badly, 400 mandates later. Among his points: Dodd-Frank’s Durbin amendment is blamed for the huge erosion of free checking: 75 percent of banks offered it before D-F. Two years later, it was under 40 percent.
The financial industry is hitting back against privacy advocates who have been building a grassroots movement against the major cybersecurity bill set to hit the Senate floor this week.
To prevent fraud in the first place, banks are currently introducing cards with so-called E.M.V. chips, which make counterfeiting cards — currently the most prevalent sort of fraud — much more difficult.