EMV Certification Questioned

Senator asks FTC to investigate barriers to complying with data-security standard

WASHINGTON—In two separate letters, U.S. Sen. Dick Durbin (D-Ill.) asked the Federal Trade Commission (FTC) and the governing body of chip-card or Europay MasterCard Visa (EMV) standards pointed questions about the sluggish certification process that may be taking its toll on retailers in the form of increased credit- and debit-card chargebacks.

In a letter dated May 11, 2016, to Edith Ramirez, the chairperson of Washington, D.C.-based FTC, the Democratic senator asked for “prompt attention and oversight” of EMV certifications, asking specific questions about the effectiveness of the process and hinting that the payment industry did not allow enough time and resources for retailers to comply with last October’s liability-shift deadline.

Some of the issues Durbin’s letter addressed included:

  • The effectiveness of the EMV certification process.
  • Delays retailers encountered with certifications.
  • The role of EMV’s governing body, EMVCo; card networks, card-issuing financial institutions, merchant acquirers, payment processors, equipment providers, the Payment Card Security (PCI) Standards Council and merchants. He asked whether the FTC examined if these parties had been “forthcoming” about their “responsibilities in determining liability for fraud ...”
  • The amount of resources stakeholders needed to achieve compliance.
  • What steps the FTC would take to “address any flaws identified.”

In a separate letter to EMVCo, also dated May 11, Sen. Durbin asked Brian Byrne, director of operations for EMVCo, Foster City, Calif., about its “lack of diverse stakeholder representation,” being governed by six global payment networks that each have one-sixth ownership stake in EMVCo.

Durbin brought up five principles employed in the United States Standards Strategy, which include transparency, openness, impartiality, effectiveness and consensus.

“EMVCo appears to fall short in each of these areas,” Durbin said in the letter.

As a result, Durbin said issues such as delays in EMV certifications and consumer discouragement over the increased time it takes to process transactions “were either not recognized or were not viewed as a priority by EMVCo and its controlling networks.”

Durbin asked that EMVCo begin a process of incorporating other stakeholders moving forward.

As part of its EMV migration efforts, the major credit-card companies set a liability-shift date for in-store point-of-sale that passed in October 2015 and a separate date of October 2017 for outdoor fuel dispensers. Retailers not equipped to accept EMV would be responsible for any chargebacks that occurred with the fraudulent use of EMV-enabled cards.

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