Federal officials examining EMV rollout?

Category: Payment Processing Technologies

Plenty of anecdotal evidence now suggests that while the initial rollout of EMV payment platforms for tier-one merchants nationwide was a little bumpy, even if it has likely reduced the amount of fraud suffered by consumers, retailers, and payment processors alike. However, this issue has now drawn the attention of a federal lawmaker and could soon lead to regulatory scrutiny in an effort to better extend protections to consumers.

In an attempt to better reduce the amount of debit and credit card fraud in the American payment ecosystem, U.S. Senator Richard Durbin, a Democrat representing Illinois, recently wrote a letter to Edith Ramirez, chairwoman of the Federal Trade Commission, according to a report from the Senator's office. In it, he requested that the FTC take a closer look at how the EMV rollout has gone, and that it provide guidance on how new EMV card readers can be more effectively and seamlessly rolled out to smaller companies now that the giants of the industry are largely already involved.

U.S. Senator Richard Durbin is asking for more attention focused at the EMV shift.U.S. Senator Richard Durbin is asking for more attention focused at the EMV shift.

What's the problem?
Durbin says that he is particularly concerned with how major credit card companies have been able to roll out better options for consumers and smaller companies, the report said. In part, he cited delays to the process, the cost of getting up to speed with the technology, and "inadequate security measures" related to how people are being asked to make payments. This letter also follows a March incident in which Durbin asked that the chairman of EMVCo better explain how the original deployment helps consumers and preserves competition among businesses of all sizes.

Specifically, Durbin is also concerned about the fact that many companies are spending large sums on new card readers - with some paying $500 apiece for the new point-of-sale devices - but that credit card companies are dragging their feet on certifying them, the report said. As a result, those stores cannot rely upon the EMV card-reading features they paid for, and instead have to continue using the less secure traditional "swipe" method for processing payments.

"I am concerned that problems and delays in the EMV certification process are imposing costly burdens on small- and medium-sized businesses and leaving consumers' card transactions vulnerable to fraud," Durbin wrote in his letter to the chairwoman. "I urge the FTC to examine how flaws and delays in the certification process can be addressed so that businesses and consumers can be better protected from these harms."

What should retailers do?
However, companies hoping to reduce the instances of fraud should still adopt EMV as soon as possible as a means of ensuring that they're going to be compliant with emerging rules from EMVCo. The more they can do to get out in front of requirements for having this kind of payment option in place for the next liability shift, the better off both they and their customers will be.