The big box interchange bill would disrupt a syste that currently worlds for consumers and businesses while keeping data secure, Suncoast Credit Union President/CEO Kevin Johnson wrote in CUInsight this week.
"Right now, this proposed bill would weaken a payments system that already exists for interchange fees, a fee that merchants and retailers pay for the privilege of accepting quick payments and immediate approvals to process credit and debit card transactions," he wrote. "The current system works in the best interest of consumers and businesses and very importantly, keeps consumer data secure. The legislation would allow merchants to choose the cheapest, likely least secure, network, and we believe consumer data would inevitably be made vulnerable.
"This bill would also allow foreign networks to enter the market, seriously jeopardizing a system that already works in the best interest of consumers and small business," he adds.
Johnson also notes that interchange fees help cover the costs of guaranteeing payments, security infrastructure, and recovering fraud expenses, among many other uses.
"If this bill passes, rather than using a trusted and secure network that has proven to be effective, retailers could choose the networks used to process payment transactions, enabling them to choose the cheapest networks that are likely less secure from a fraud perspective, without considering possible harm to all financial consumers," he wrote. "While this legislation would have a tremendous impact on the income we depend on to protect members from fraud, we are more concerned about the impact this will have on the security of consumer data."