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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.
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