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OP-ED: The Future of Payments Technology Is Bright
Card networks and financial institutions are preparing for the future of payments by expanding their investments into artificial intelligence (AI) and machine learning to quickly identify instances of fraud. Unfortunately, retailers have yet to show the same amount of dedication when it comes to investing in payments technologies of tomorrow, hindering innovation and leaving consumers at risk of future data breaches. From the shift to EMV-enabled payments cards and the rapid expansion of contactless transactions to the latest in tokenization and biometrics, investments in the future of these emerging payments technologies will only better serve the demands of consumers, retailers and card networks. So why won’t retailers invest? The problem is PIN. Continue Reading
OP-ED: Artificial Intelligence Should Be the Next Big Payments Push
When we think about artificial intelligence (AI) and machine learning, the first image that comes to mind might be a chess-playing computer or a driverless car. In addition to such futuristic applications, these cutting-edge technologies are already changing and enhancing many aspects of our day-to-day lives, including how we make purchases and protect our valuable financial information. Consumers today are increasingly demanding more flexible ways to pay when they buy goods and services, from groceries to car washes. As a result, card networks and financial institutions have made enormous investments in developing lightning-fast and secure ways for customers to pay for goods and services, many of which rely on machine learning and AI. Continue Reading
OP-ED: Retailers need to do more heavy lifting on payment security
The availability and convenience of electronic payments hinge on them being a secure method of exchanging money. For now, consumers are still willing to use these technologies, but retailers risk eroding trust in commercial institutions with their lack of security preparation. Consumers expect the retail and payments industries to move forward together in developing safer, more secure technologies that will protect consumers from the intrusion and disturbance of fraud. Clearly, the data breaches of the past few years have made an impact on consumer attitudes, and they are becoming more vocal. Retailers must decide if they will heed this call and do the right thing by investing in the security we need today and the innovation of tomorrow. Continue Reading
Op-Ed: National data security standards are better than PIN
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 … Continue reading
Op-Ed: New Report Shows Benefits Of Payments Innovation
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. Continue Reading
Op-Ed: Retailers Want to Turn Page on Durbin to Escape Accountability for Its Failures
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 … Continue reading
Op-Ed: Fed finds (again!) that Durbin Amendment hurts consumers
The Federal Reserve Board of Governors recently released a report called “The Impact of Price Controls in Two-sided Markets: Evidence from US Debit Card Interchange Fee Regulation.” That dense title is one that few consumers—or even policy wonks—will put on their August reading lists. They should. It proves, yet again, that lawmakers like House Financial Services Committee Chairman Jeb Hensarling (R-Texas), Reps. Blaine Luetkemeyer (R-Mo.), and Ted Budd (R-N.C.) and others were right: the Durbin amendment, shoved into the 2010 Dodd-Frank bill at the last minute by politicians doing the bidding of merchants like Walmart, is the reason that American consumers are paying more to bank. Continue Reading
Op-Ed: Markup Of CHOICE Act Proves The Retailers Have No Clothes
In the Hans Christian Andersen tale the Emperor Has No Clothes, a king is convinced by two scam artists that they can weave him a suit that can only be seen by the best and brightest in the land. As the Emperor parades around naked, his subjects are fearful to comment because they don’t want to be viewed as stupid. It finally takes a child to blurt out what is clear to everyone – that indeed the emperor was wearing nothing at all. This story is reminiscent of the fairy tale retailers have been telling for the past seven years – trying to convince Congress that price controls on debit card interchange fees are beneficial to consumers and small businesses. Continue Reading
Op-Ed: Banklike data security rules for retailers would reduce breaches
Target’s recent settlement with 47 states and the District of Columbia over the retailer’s 2013 data breach brought to mind this well-known John F. Kennedy quote: “There are risks and costs to a program of action — but they are far less than the long-range cost of comfortable inaction.” The $18 million settlement is in addition to $202 million in legal fees and other expenses resulting from the breach, in which hackers stole data from up to 40 million credit and debit cards of shoppers who had visited Target stores during the holiday season. Continue Reading
The Durbin amendment: The ultimate double whammy
The Financial CHOICE Act, which begins to untangle the web of harmful rules that Dodd Frank put in place, is likely to pass the House this week. That’s very good news for community banks and credit unions, but it doesn’t mean Congress’s work on financial reform is done. One CHOICE Act provision, repeal of the Durbin amendment, was left behind. That’s why, after wrapping up the CHOICE Act, the House Financial Services Committee must go back and pass Durbin amendment repeal again. It’s already done so in two separate congresses—because it’s the right thing to do. Repeal will help the community financial institutions that are the backbone of our economy. And it will prevent the retail industry from continuing to pick the pockets of consumers. Continue Reading