WASHINGTON–The EMV liability shift deadline may have come and gone as of Oct. 1, but the National Retail Federation told Congress that the new chip-and-signature credit cards without a PIN will not stop data breaches and that small businesses should not be pressured to install the equipment to accept them at the expense of more effective technology.
“The new EMV equipment does not stop breaches,” NRF Senior Vice President for Government Relations David French said in a statement. “Indeed, in many cases it provides no significant benefits either to the business or to the business’ regular customers. It is merely an additional expense small businesses are being told to bear.”
If small businesses are pushed to adopt Europay MasterCard Visa technology, alternatives such as near-field communication contactless payment, mobile wallets and other smartphone-based technology “may effectively be locked out of the market,” French said.
“These are important considerations that businesses of all sizes must carefully ponder,” French said in the statement. “It would be inappropriate to prejudge their decision-making and stampede businesses into the adoption of solutions less protective for businesses and consumers than what has existed throughout the industrialized world for more than a generation.”
The National Retail Federation said chip cards without a PIN may be more difficult to counterfeit, but do nothing to protect lost or stolen cards.
“While the new cards make it somewhat more difficult for criminals to use stolen card numbers, they do not actually prevent numbers from being stolen in the first place, and stolen numbers can still be used for online and other types of fraud,” the NRF said in its statement to the House Small Business Committee, which held a hearing yesterday on what chip-based cards will mean for small businesses. State Department FCU CEO Jan Roche testified at the hearing, as CUToday.info reported here.
French said credit and debit card fees are the second-largest expense for many small businesses after labor, and that the card industry imposes “a multitude of complex rules on small businesses.” Chip-card readers and installation can vary from “a few hundred dollars to thousands of dollars” per terminal, he said, with an industry average of $2,000.