Interchange wars: Why ‘top of wallet’ is no longer enough

Interchange bill would threaten consumer data privacy, security

July 20, 2023

The big box interchange bill brings many cybersecurity concerns, CUNA wrote to members of Congress this week. CUNA Deputy Chief Advocacy Officer Jason Stverak noted that interchange fees cover fraud detection, theft protection and card replacements, among other things for “pennies” on the dollar.

“Every year, consumers spend $6.7 trillion using their credit and debit cards,” he wrote. “Transaction databases are a treasure trove of information and a constant target for cyber thieves and dark web data merchants. And now big box retailers want Congress to lessen their data security burden when it takes significant investment and constant vigilance to protect consumer data.”

He also highlighted CUNA and the American Association of Credit Union League’s recent study on interchange regulations, which noted:

  • With rare exceptions, data shows that merchants show little interest in stemming the tide of rampant data breaches that lead to fraud.
  • Less secure government-mandated payment routing would lead to the loss of expansive liability protection from fraudulent transactions on their cards.

“The proposed changes to the credit card system threaten consumer data security and privacy as well as the availability of much needed credit for consumers. The legislation contains no requirement for merchants to protect consumers’ data, allowing them to pick a routing system based on cost without consideration of security,” Stverak wrote. “Credit unions urge you to oppose S. 1838 /H.R. 3881 or any legislation affecting the security and efficiency of the interchange system.”