(WASHINGTON, DC) In light of today’s House of Representatives Committee on Small Business hearing on the transition to EMV payment cards, Steve Pociask, President of the American Consumer Institute Center for Citizen Research, issued the following statement:
“I thank Chairman Chabot and the House Committee on Small Business for holding hearings on this important subject. I was pleased to hear the Chairman plans to hold subsequent hearings that will include the perspective of small businesses, retailers, and hopefully consumer advocates.
While the transition to chip-equipped cards, otherwise known as EMV, is an important step forward, I have long argued that combining those chip cards with a Personal Identification Number (PIN) is a critical security component that cannot be dismissed. Unfortunately, the credit card issuers, the big banks, and the card processing networks continue to trot out the same old arguments against using the combination of chip and PIN they have stubbornly maintained for years.
Along with their trade association, they essentially argue that we should ignore the documented benefits of chip and PIN payment cards across the world and adopt a half-measure here at home instead. They continue to foolishly argue that consumers are unable to remember PINs to conduct transactions, that newer, better authentication technologies are just over the horizon if we continue to wait, and that PINs will do little to prevent online fraud.
Well, one need not look further for evidence of the effectiveness of using PINs with credit cards than the fact that hundreds of millions of retail bank accounts in the U.S. require PINs to conduct transactions. Surely, if financial institutions believe PINs are secure enough to protect American bank accounts, they should agree to couple them with chip-equipped cards to ensure consumers’ credit transactions are more secure.
Furthermore, the often-repeated argument that chip and PIN will do little to combat online fraud neglects a much needed focus on how we can implement PIN authentication mechanisms for online transactions. The technology behind secure online PIN authentication methods has been around for years. So why isn’t the nation’s credit card industry exploring this technology to complement their chip-equipped cards?
Chip and PIN technology is not a cure-all for all forms of credit card abuses, but it is a better method of protecting consumer transactions than just chip cards with signatures. If small businesses across the country are investing in new payment terminals to accept chip cards and now may bear more financial liability if fraud occurs, they should at least be armed with the most secure technology available today, and that is chip and PIN.”