As the October 1st liability shift approaches for banks and retailers to use new "chip" credit cards, many in the financial services industry are making dubious claims about the deployment of new cards and the readiness of retailers.
Randy Vanderhook, executive director of the Smart Card Alliance is falsely claiming that banks and card networks are outpacing retailers for the EMV transition in an article in today's San Diego Union-Tribune:
"Issuers have largely gotten the cards into consumer's hands, but merchants have not activated terminals or completed migration for chip," said Randy Vanderhook, executive director of the Smart Card Alliance, an industry association that aims to stimulate adoption of chip cards.
The most recent numbers announced by VISA indicate that less than one-fifth (18%) of their 720 million debit and credit cards as of July contain a new embedded chip and will be ready for the October 1st EMV shift. The truth is that banks, credit unions and the card networks are nowhere close to replacing the more than 1.2 billion cards Americans carry in their wallets.
Retailers are spending more than $8 billion to upgrade their point of sale terminals to accept new "chip" cards before the October 1st liability shift deadline, and most large retailers will have the new terminals up and running this fall.
"Retailers are making a multi-billion dollar investment to protect customers and reduce credit card fraud," said Brian Dodge, executive vice president of the Retail Industry Leaders Association. "Unfortunately, the claims being presented by the financial services industry represent an attempt to mislead reporters and consumers rather than provide the facts surrounding the upcoming October 1st liability shift."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.