On-Site Coverage: Durbin Interchange Amendment Muddles Fraud Picture, Visa Panelists Say
WASHINGTON — A panel of security experts told executives attending Visa's Global Security Summit Wednesday that the interchange cap mandated by the Durbin Amendment will likely leave card security efforts more muddled than before.
The panelist were almost unified on the notion that the Federal Reserve choosing and dictating card data protection technology would be a bad idea. One panelist, Aaron McPherson of IDC Financial Insights, expressed a hope that the Fed might simply dictate the use of smart card such as chip and pin.
But other panel members doubted that would happen. Nessa Feddis, senior counsel with the American Bankers Association, thought that would be a bad idea since it would be obsolete by the time the rule was finalized and, in the proposal, would give criminals a road map to where they need to develop expertise.
Meanwhile, Gray Taylor, executive director of the National Alliance of Convenience Store Security Standards Board, predicted the Durbin amendment would or should lead to the consumer being drafted into the battle against fraud. He contended that too many issuers are still urging card holders to use the more fraud-prone authentication method, their signatures.
But Feddis responded that Visa had developed signature transactions in order to please merchants who did not want to upgrade their existing payment systems to handle personal identification numbers. Taylor responded by calling that a “fantasy.”