The hearing didn't only focus on whether PINs are needed, and included comments by three of the four businesses present about the high costs of converting to chip-card payment terminals and the supporting software.
Scheeler said his company, Hub, has four retail outlets in North Dakota that sell gasoline and merchandise where it has cost about $44,500 per store to convert fuel dispensers and payment terminals to accept the chip cards.
By contrast, a fourth business owner at the hearing, Jami Wade, said her costs were just $300 to convert a single payment terminal at her restaurant, Capitol City Cork, in Jefferson City, Mo. She said one of her regular dining customers also runs a business that processes her card payments, which helped her prepare for the chip card conversion.
Paying to convert "is the cost of doing business," she said. "I look at it as another insurance policy that's peace of mind for me."
Art Potash, CEO of Potash Markets in Chicago, said it cost his company $8,000 to convert to chip cards for two of three stores at a cost of $1,000 per payment terminal. The backend software won't be ready until the end of November, he said.
In making the case for PIN authentication, Potash added, "PIN works today and we face the busy holiday season with greater fraud liability over our heads."
Committee members asked why banks and card companies support the use of a customer signature when using a credit card over a PIN. One witness, Ed Mierzwinski, director of consumer programs for the nonprofit U.S. Public Interest Research Group, asserted that banks and card companies support the signature because it results in greater revenues for them than processing via a PIN.
He asserted that Visa and MasterCard own networks that process signatures, and that there are more businesses to compete with the credit card companies to process PIN transactions. "Visa and MasterCard have long functioned as a cartel with market power to drive traffic to their own payment networks which are signature-enabled, not PIN-enabled," he said in a statement. "They earn much higher merchant swipe fees."
Fabens of the Electronic Payments Coalition didn’t contradict Merzwinski’s characterization when asked for a reaction, and conceded that electronic payments are “a competitive market.” He noted that retailers are planning to introduce alternative payment systems and face no legal barrier in doing so.
It isn't clear how the House committee will use the testimony other than to understand more clearly the controversies related to the chip card rollout in the U.S.
"We are not here to take sides," said committee Chairman Steve Chabot, R-Ohio, in a statement.
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