Senator Durbin Seeks Answers from FTC on EMV Certification Process

Sep 26, 2016

The implementation of EMV in the U.S. has been anything but straight forward. Even though merchants were informed years in advance of the Oct. 1, 2015 deadline, an overwhelming number of merchants have yet to shift from signature credit cards to EMV, or “chip and PIN”. Why? U.S. Senator Richard Durbin (D-IL) recently sent a letter to the Federal Trade Commission (FTC) to find out why.
Senator Durbin believes that backlogs in the EMV certification process are to blame for retailers being unable to accept chip card transactions. The small and mid-sized businesses that have invested in the EMV-capable payment terminals have experienced lengthy delays in receiving hardware and software certifications. They may have the equipment, but the ability to accept chip cards at the point of sale has come to a halt.
Durbin wrote, “The e is opaque and confusing. So far only a fraction of merchants who have sought certifications have been able to obtain them, and the merchants who have been stuck in the certification queue are at increased risk of being victimized by fraud.”
In his letter, Durbin went on to request that the FTC not only look into the EMV certification process within 30 days, but also provide answers to a series of questions. In March, Durbin also sent a letter to EMVCo, owned by American Express, Discover, MasterCard, Visa, JCB and UnionPay. Durbin requested the EMVCo’s thoughts on whether or not the deployment of EMV in the U.S. was preserving competition and protecting customers. He also asked for clarification on what percent of EMV cards – both worldwide and in the U.S. – are currently enabled for PIN authentication.
“I am concerned that problems and delays in the EMV certification process are imposing costly burdens on small- and medium-sized businesses and leaving consumers’ card transactions vulnerable to fraud,” Durbin wrote.
Durbin is not alone in his concerns. In May, Walmart Stores Inc. filed suit against Visa. The reason: Walmart claimed Visa wanted the retailer to use a less-secure method for verifying debit cards (chip-and-signature vs. the more secure chip-and-PIN method). Wal Mart felt that Visa was proposing to route transactions through its own networks, in order to boost profits.
Considering the massive investment involved in implementing EMV, it is understandable why so many are raising their hands to ask questions. Without the use of PIN, the investment in EMV technology will not provide the promised security against fraud. Ultimately, the upgrade falling short leaves customers and merchants vulnerable.
For those in the high risk industry, EMV cards have been something to look forward to. With high risk processing fees being so high, this new card was going to be a great improvement for the industry. Unfortunately, the current delays could push full implementation off for years.
One solution to the current problem: a high risk merchant account from a high risk provider – like eMerchantBroker – can offer chargeback protection programs. These accounts involve no set up fees for most merchants and high volume solutions. Even though EMV is delayed (possibly until 2020), merchants can still secure the solutions they need to protect their business and its customers.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

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EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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