The National Retail Federation (NRF) blasted the EMV migration noting small businesses should not be pressured to install the equipment to accept them at the expense of more effective technology. The NRF told Congress that new chip-and-signature credit cards without a PIN will not stop data breaches.
The NRF says 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.
Cards currently being issued by U.S. banks feature a computer microchip that will eventually replace cards’ easily copied magnetic stripe to store data. But the NRF says cards also need a secure personal identification number, or PIN, which would eventually replace easily forged signatures, as is done in all other countries that use EMV cards. While the chips make the cards more difficult to counterfeit, they do nothing to protect lost or stolen cards, while a PIN alone could prevent both types of fraud.
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 says 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, with an industry average of $2,000.
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