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CUNA Tells Congress Merchants Push Status Quo on Data Security
Thursday, March 26, 2015 6:30 AM

Credit Union National Association and other financial trade organizations last week wrote to members of Congress asking one question: Why are merchants fighting to maintain a status quo that is clearly not working for consumers?

The question was posed in a letter to legislators in response to suggestions from merchants that increased usage of personal identification numbers (PINs) will help stem the tide of data breaches.

"Winning the war against cybercrime will take a forward-looking approach to preventing data breaches anywhere they occur—at the register, with a mobile phone, or online," the letter reads. "The financial industry is innovating and building the security technologies that will evolve our payments system, ensuring consumers feel confident their data is safe."

The letter cites a number of studies and articles that show PIN technologies are no substitute for the strong data security legislation CUNA and others have been calling on Congress to enact.

These include:

  • None of the wide-scale data breaches would have been prevented by merchants accepting chip-and-PIN cards;
  • 75% of U.S. merchants do not have the capability to accept PINs, even on debit transactions, according to the Federal Reserve;
  • PIN-debit fraud rates have increased by more than threefold since 2004, according to a study by the Federal Reserve Bank of Atlanta;
  • More than 80 percent of merchants fail on card security compliance;
  • When asked about EMV chip cards, nearly one in five merchants responded, "What is EMV?" according to a recent retailer survey; and
  • Chip-and-PIN technology does not protect consumers against online or other card-not-present fraud.