Credit unions, retailers tussle over payment security

Credit unions and retailers are engaged in another tussle over payment security after a grocery trade group suggested slowing down the implementation of card systems that are considered more secure.

The tangle began last week when the Food Marketing Institute (FMI) told card networks that its members have not been able to implement systems accommodating chip-and-pin or chip-and-signature cards by a certain deadline.

{mosads}The group suggested that networks delay their plans to shift liability for payment fraud to parties using the least-secure technology in October.

The letter prompted a fierce response from the National Association of Federal Credit Unions (NAFCU), which criticized the group’s request in a letter to top lawmakers.

“FMI is more concerned about the cost of complying with the EMV standards and how quickly they can process transactions than it is about consumers and doing everything they can to protect their customers from future breaches,” wrote NAFCU President and CEO Dan Berger.

“FMI’s delay tactic is remarkable given the extraordinary number of merchant and retailer breaches that have occurred in recent months,” he added.

EMV technology — named for developers Europay, MasterCard and Visa — involves embedded microprocessor chips designed to protect cardholder data.

On Friday, the Retail Industry Leaders Association (RILA) fired back at the NAFCU, accusing financial institutions of rolling out chip-and-signature cards as opposed to chip-and-pin cards, which it called more secure.

“Chip and PIN cards have become the mainstay in the rest of the industrialized world, sharply reducing fraud and cyber-attacks, while unfortunately making U.S. retailers and consumers the prime target for would-be hackers and credit thieves around the globe,” the group said.

“NAFCU and others in the financial services industry have yet to adequately explain why they refuse to use readily available and proven technology to safeguard American consumers.”

The RILA also said it has not called for a delay of the liability date.

Financial institutions and retailers have long been at odds over who is responsible for data breaches and what should be done to fight them.