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What's Up in Washington: The State of EMV in DC (MAG Quarterly- Volume Three, Issue Four)

By Liz Garner, Vice President, Merchant Advisory Group

December 8, 2015

As we all expected, the October 1 EMV liability shift deadline came and went without the sky falling.  And while that is no surprise to many of us in the payments industry, there was a great deal of consternation as to how Washington would react to the entire event. There has been a heightened amount of activity and coverage surrounding the transition date, but at the end of the day, nothing has really changed.  

A few key highlights from October:

FBI Bulletin:

The first week in October the FBI issued a Public Service Announcement about chip card technology that explicitly noted the added security provided by PINs. After some lobbying by the financial services industry, they took down the statement and published a revised statement that was less bullish on PIN. For more details check out this coverage in Fortune.

Payments Innovation Caucus Briefing:

The Payments Innovation Caucus members in the House of Representatives hosted a briefing for legislative staff and other payment stakeholders on October 19th to discuss the EMV transition and impact on constituents.  The list of participants included:

  • Carolyn Balfany – Group Head, U.S. Product Delivery, MasterCard
  • Martin Ferenczi – President of Oberthur Technologies North America
  • Jennifer Miles – President, Americas at VeriFone Systems
  • James A. Reuter – EVP and COO, FirstBank – Lakewood, Colorado
  • Tom Robinson – President of Robinson Oil Corporation
  • J.J. Gilmore – YUM! Brands

Many of you may know J.J. from his participation at the MAG. He did a tremendous job explaining how EMV only solves one specific type of fraud, and how other security technologies such as tokenization and encryption are more critical components of fraud and breach prevention in his industry vertical.

Chase Tweet:

Sometime in the middle of all the EMV DC activity, someone from JP Morgan Chase tweeted that the bank was going to be putting PINs on their credit cards. Senator Durbin’s office saw the tweet and highlighted it through their Twitter account. Despite the excitement from several in the merchant community, Chase ended up having to rescind the comment/tweet. See more details here.

Small Business Hearing – Round 1:

The Small Business Committee has not engaged on many payments issues during the past few Congressional sessions; however, they decided to hold two hearings on the EMV rollout and the impact on small business.  The witnesses at hearing one included:

  • Stephanie Ericksen, Vice President, Risk Products, Visa Inc.
  • Scott Talbott , Senior Vice President, Government Affairs, ETA | Electronic Transactions Association
  • Paul Weston, President & CEO, TCM Bank, N.A.
  • Jan N. Roche, President/CEO, State Department Federal Credit Union

For more information about the hearing, including witness testimony, visit the Committee website here.

One item of note, was an interesting exchange between the Ranking Member of the Committee and Stephanie Ericksen of Visa about whether or not the more secure EMV technology would result in an interchange reduction. Watch the video here.

Small Business Hearing – Round 2:

What was missing from the first round of witnesses? Oh right, an actual merchant small business. In an effort to get more and broader stakeholder feedback, the Committee held a second hearing on the topic later in the month. Witnesses included several small merchants and a consumer advocate:

  • Jami Wade, Owner, Capitol City CORK and Provisions & Capitol
  • Keith Lipert, Owner Keith Lipert Gallery
  • Jared Scheeler, Managing Director, The Hub Convenience Stores, Inc.
  • Art Potash, CEO, Potash Markets
  • Ed Mierzwinski, Consumer Program Director and Senior Fellow, U.S. Public Interest Research Group

For more information about the hearing, including witness testimony, visit the Committee website here.

As many of you are aware, the MAG repeatedly asked the global card networks to delay enforcement of the EMV liability shift due to upstream delays in getting full EMV technical specifications to market, which consequently significantly delayed the certification process. We continue to maintain that network liability shift rules that effectively force merchants to choose between an EMV liability shift and preservation of debit routing rates in an unfair practice under existing law. If you have concerns about this or you have seen unusual situations due to EMV and would like to share your individual company perspective, as well as any early data on the liability shift impact to your company, please reach out to Liz Garner at or 202-286-6841.