WASHINGTON (10/9/14, UPDATED 6:22 p.m. ET)--Responding to credit union concerns about the impact of merchant data breaches on credit unions, both VISA and MasterCard high-level officials met with Credit Union National Association President/CEO Jim Nussle to talk about the need for fixes to a very serious problem.
"Credit unions are fed up with the rapid-fire succession of merchant-based data breaches--massive and small--that compromise their members' sensitive financial data and drive up credit union costs," Nussle says. "It's time for all parties to work together and CUNA is taking all avenues to do its part to protect credit unions."
Nussle and senior CUNA staff met with Bill Sheedy, VISA global executive for corporate strategy, and Tim Murphy, general counsel for MasterCard, in separate meetings today.
Nussle pressed home credit unions' growing outrage and frustrations regarding such things as:
VISA and MasterCard each made commitments to address the lack of clarity over disclosure rules. Regarding reimbursements, they said they'd work for more transparency about how VISA and MasterCard process claims and determine how much is paid.
The card company executives both stated that they understood credit unions' concerns as laid out by CUNA and both acknowledged their companies are working to improve Payment Card Industry (PCI) standards.
They also said that adoption of Europay-MasterCard-Visa (EMV) chip technology, and tokenization of card information, which replaces sensitive payment data with a unique identifier or token to enhance security, would reduce future data breach costs. CUNA agrees that such innovations will be an important step in boosting card security, although credit unions will be exposed to significant potential breach costs for quite some time until these new technologies are widely adopted.
Both VISA and MasterCard indicated to Nussle their interest in working with CUNA going forward to provide--more quickly--additional, and more useful, information to credit unions when a major breach occurs. Nussle vowed that CUNA would immediately pass that information on to member credit unions.
People need to know they are being heard, VISA's Sheedy told the CUNA leader during their meeting, and that those in charge are invested in fixing this problem. Murphy said he appreciates Nussle raising these concerns and reiterated MasterCard's commitment to credit unions.