Today, the Electronic Payments Coalition joined a host of other financial trade associations in sending the below letter to lawmakers expressing our strong opposition to any expansion of the Durbin Amendment. Support for any legislation of this kind would undermine the overall health and security of the U.S. payments ecosystem while in turn creating negative implications for consumers and small businesses amidst the current economic recovery.
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Statement from Jeff Tassey, chairman of the board of the Electronic Payments Coalition, on Phoenix Marketing International’s Rewards Credit Cards Report
“Phoenix Marketing International’s report on rewards credit cards underscores the critical importance that contactless payments played amidst the COVID-19 pandemic and the essential role they will play in the years ahead for consumers of all income levels. As noted in the study, even among households earning less than $20,000 per year, 82 percent own a rewards card, and 90 percent of their spending dollars are charged to these cards. Although retailers continuously criticize rewards programs for higher interchange fees, in reality, the benefits outweigh the costs through increased sales, faster transactions, and efficient and guaranteed payments. This report confirms what we’ve been saying since the Durbin Amendment was signed into law. The vast majority of consumers across all income levels use credit cards and prefer to use cards with rewards programs because of the value they provide.”
After more than a year adapting to the COVID-19 pandemic, multiple vaccines are now in circulation and millions of Americans are being inoculated daily. States and localities have begun curtailing restrictions on businesses, and the American public is starting to return to some semblance of the way things used to be. While a return to normal is on the horizon, there are some aspects of pandemic life, such as the increase in use of electronic payments, that are here to stay.
Americans were dealt an incredibly difficult hand in 2020 due to the global Covid-19 pandemic and the subsequent economic fallout, where businesses shuttered and unemployment rates soared. As the pandemic stretches on, the payments industry continues to work behind the scenes to keep business running smoothly.
The payments industry — which comprises credit unions, community banks, card networks and other financial institutions and which my organization represents — has worked with government leaders across both sides of the aisle for decades to protect and advance the needs of consumers with regard to their online information. As the new administration takes up the reigns of policy, this work will continue.
With the Covid-19 pandemic still imposing a huge financial weight on the nation’s small businesses and families, many legislators are understandably eager to pursue policies they feel will ease that burden. But lawmakers must be careful that they are looking at policies that really will help.
Unfortunately, some sectors—in this case, retail—are using the crisis to push a decade-old agenda that has done, and would do, nothing to help struggling Americans and small businesses. In fact, their agenda could hurt.
The COVID-19 pandemic has led the United States down a fast-track of innovation in almost every sector. Seismic levels of disruption brought on by this public health crisis have ushered in an era of advanced technological adoption that once seemed years away—but is now the status quo. From the shift to EMV-enabled payments cards and the rapid expansion of contactless transactions, continued investment in the future of emerging payments technologies will only better serve the demands of consumers. In the case of mass transit, adoption of new contactless electronic payment technology provided great economic value to struggling mass transit systems while providing consumers with a new level of safety and convenience, increasing their confidence in mass transit systems as we adapt to and recover from the pandemic.
Over much of the last year, tens of millions of Americans have shifted preferences, choosing to have their groceries delivered, work remotely, and rely more on online banking and payment systems. Some merchants, especially small businesses deemed “non-essential,” transitioned to a “card only” payment method to stay in business and accommodate consumer and employee safety concerns over cash. Approximately, 40% of Americans say they have used cash less frequently in 2020 since the onset of the pandemic.
Financial inclusion is receiving increased attention in the U.S. and worldwide as governments and the private sector look to advance solutions that ensure consumers have access to vital financial services to manage their everyday lives.
Financial inclusion is both quantitative and qualitative. It is not just about getting money, credit and financial services into the hands of low-income or vulnerable populations. It also means guaranteeing that services are affordable and appropriate for the populations in question. This may mean financial education, “microfinance” or assisting individuals in establishing a credit history through the use of appropriate alternative data.
The holiday shopping season is upon us, and amid the COVID-19 pandemic, businesses are seeking to adjust to the “new normal” of retail sales. Due to the increasing prevalence of e-commerce, concerns over data security and fraud are more pressing than ever.
Driven by the need for safe, secure, and contactless payment options, consumers and small business owners are relying on the electronic payments industry to safeguard their financial information and make transactions. Luckily, the industry hasn’t hesitated to rise to the challenge.
The Covid-19 pandemic has fast-tracked America’s dependence on technology, with more people digitally connected than ever before. As a result, reports of cyberattacks have skyrocketed in both frequency and scope.
Daily online breaches in the U.S. have up to quadrupled since the start of the pandemic, according to the Federal Bureau of Investigation, leaving no industry unscathed. One step that organizations can take to combat these growing attacks is to support National Cybersecurity Awareness Month, which takes place each October. Championed by the U.S. Department of Homeland Security and the National Cyber Security Alliance, this is a collaboration between government and industry to make sure every American has the resources needed to stay safe and secure online.
July marks the 10th anniversary of the Dodd-Frank Act, which includes the controversial Durbin Amendment—a policy that has done nothing but harm consumers and financial institutions since its inception.
Congress passed the Durbin Amendment based on assertions that lowering debit card interchange fees—small charges merchants pay banks when a customer makes a purchase through a debit card—would allow merchants to lower prices for consumers while at the same time not harming credit unions and community institutions. The payment card market, however, like the popular reservation platform Open Table, is a two-sided market with two sets of customers: consumers and businesses. Government cannot intervene on behalf of one group of customers without taking away from the rest.