cancel
Showing results for 
Search instead for 
Did you mean: 

Credit Card Networks Must Face Merchants' Chip-Reader Suit

tag
Anonymous
Not applicable

Re: Credit Card Networks Must Face Merchants' Chip-Reader Suit


@Open123 wrote:

@Anonymous wrote:

http://www.bloomberg.com/news/articles/2016-10-04/credit-card-networks-can-t-escape-merchants-chip-reader-suit

 

Sounds like an anti-trust deal. I somehow doubt they'll get the current liability shift cancelled and ones for future technologies prohibited from happening, but who knows?


From what I've read, apparently there may exist documentation and at least a major Issuer boasting on a conference call a plan to shift the costs of migration to Merchants.  If true, this is collusion and violates US anti-trust laws.  Obviously, Merchants should not only have a choice on how to run their business, but also be provided an environment where there exists vigrous competition amongst their vendors.  Whose to say that without this alleged collusion, a major issuer wouldn't have kept the status quo, which clearly some Merchants and consumers prefer?

 

For instance, all this EMV has done, say, at a place like Trader Joe's is to (1) create a cash only line, (2) create longer and slower general lines, and (3) make people flock  elsewhere during peak times.  Not to mention the 6 months or so since inception at being belligerently dictated to by minimum wage cashiers on how to use my card.  Unbelievable.  Are we worred about fraud at Grocers?  This is why Safeway hasn't even bothered, yet.

 

I suspect most CC fraud occurs online or involves ID theft, none of which is alleviated by EMV.


I don't blame the cashiers for (3); they probably run into a whole lot of people on a daily basis who still can't use the chip properly. My Trader Joe's doesn't have a cash-only line, for what it's worth.

Message 11 of 14
Anonymous
Not applicable

Re: Credit Card Networks Must Face Merchants' Chip-Reader Suit


@Anonymous wrote:

@Anonymous wrote:

@Anonymous wrote:

I can see where you're coming from... The rewards are nice, I agree. I also agree that they aren't going to lower prices if interchange fees are lowered. 

 

I did forget about the exemption to the Durbin amendment, so you raise a good point; however, I don't agree how one of my local CU's charges $2.00 per debit transaction after you use your PIN 8 times at a POS terminal. I do think the trade off for free checking without requirements is worth a small fee for PIN transactions after a certain amount per month at the moment, but I do think the government should be required to eliminate those for all banks and credit unions. Credit unions would have to make up for it somewhere else, probably in terms of raising interest rates .25% or something on their loans and credit cards, but I'd gladly take that if it means unlimited fee free PIN purchases/higher security and the continuance of no requirements for free checking. 

 

I really do think Americans will prefer contactless when they only see 5% of mechants taking swipe transactions in the future. Everyone is in such a rush so I think it would be a hit. We should take some advice from Steve Jobs... "We don't know what we want until we try it," sort of thing. I also think merchants who take contactless now that Apple and Android Pay are technologies exist tshould be able to determine that type of transction and forgo the PIN requirement. Contactless shouldn't require a PIN and should be capped at a certain value unless it's through Apple or Android Pay, and the system should be coded that way. Now that merchants in the U.S are re-writing their software code for chip compliance, the might as well tweak it to be able to recognize Android and Apple Pay over a contactless card. 


$2 is insane! I was thinking it was more like 10-15 cents per. At least they give you a few free ones per month?

 

Re: contactless, I don't think most cards will get it. It'll probably be something that's on the higher-end cards for the most part--if they bother. Something that might be interesting though is if you'd be able to tap the Citi Costco card and automatically have it recognize your membership; that might make it worthwhile for some.

 

For the most part, however, issuers seem to be pushing phone-based payments exceptionally hard, and people don't see the benefits yet. They might never do either if stuff like Quick Chip becomes more common and effectively makes EMV transactions as "fast" as swipe. Then again, I've been predicting that mobile payments will be mostly app-based here, which could be totally wrong.


Yes, I agree, $2 is insane. AmeriCU charges $0.25 per debit PIN transaction, with 0 free per month, which is also unreasonable. It's not like these financial institutions aren't making any money off of debit purchases. What's even more surprising is that these are not-for-profit, member owned institutions that have the best interests of their members in mind. You would think a credit union would prefer to lower fraud costs by encouraging PIN use and not worrying about the higher interchange fees by running a debit card as credit. By reducing the overhead instead of pushing for more profits, the members would (or I should say "should") be happier that way. 

 

The only time I prefer to run a debit card as credit (even though I don't do this anyways) is when I'm buying gas, since the gas holds are completely different on debit cards than credit cards when ran as debit. I think forcing customers to use PIN at a gas pump could reduce gas/cash price differences since it would cost the station next to nothing to accept the card compared to what it costs now. Keep in mind, I only think the lower interchange argument will work if EMV & PIN debit is used and not zip PIN-less & EMV debit, since gas pumps are a hot spot for card and PIN skimmers since they're outside. I think credit cards will always cost a gas station quite a bit of money, so I could see them changing debit transactions to the cash price and only charging extra for credit card transactions, even with a PIN.

 

Quick chip is definitely an interesting concept and also a bad idea at the moment (at least I think). While chip itself is safer and less fraud prone, quick chip itself is a new technology, and with any "new" technology there are bugs and they are more vulenerable to hacking than more mature technology and programming. Merchants like Wegmans are waiting for quick chip and it's driving me insane because they keep pushing back the chip reader activation because of this. Since the technology allows the information to sit in the terminal until the process is completed, and like I've said, since it's newer, I think hackers will try to penetrate it more. We should just do the programming correctly and do offline PIN transactions so we don't have to do this quick chip thing. I understand there's one advantage to online transactions but they're so much slower with these chip cards. 


I don't think they make all that much money on debit transactions or else the fee would be much lower/nonexistant. Remember, they're not for profit and owned by the acountholders.

 

As for Quick Chip, it's not exactly "new" technology--it just skips a few parts of the EMV workflow that aren't actually "necessary" in the US. The downside is that it makes offline PIN more of a hassle, but I imagine that's a feature to Visa and not a bug. Also, if we want faster online transactions, we should be bugging retailers to not use dialup card processing.

Message 12 of 14
Anonymous
Not applicable

Re: Credit Card Networks Must Face Merchants' Chip-Reader Suit

tmiw the use of dial-up is unreal!
Message 13 of 14
Anonymous
Not applicable

Re: Credit Card Networks Must Face Merchants' Chip-Reader Suit


@Anonymous wrote:
tmiw the use of dial-up is unreal!

To be fair, a lot of it is due to places not having very many choices in terms of broadband provider. There are also some that simply don't want to deal with the additional PCI compliance hassle a broadband connection would bring.

Message 14 of 14
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.