A retail trade group would like the payment industry to slow its roll regarding shifting fraud liability from banks to merchants.
The Food Marketing Insitute (FMI) -- a group which represents thousands of retail food stores and pharmacies -- has asked Visa Inc., MasterCard Inc., American Express Co. and Discover Financial Services to delay a plan, currently set to take effect in October, that will hold merchants responsible for fraudulent transactions if they haven't implemented hardware and software that can accept chip-based payment cards. The Wall Street Journal reports that the FMI, which sent its request letter to the aforementioned companies last week, is asking that the deadline be pushed back to 2016.
"Regardless of how strong the commitment or how many dollars invested, the reality is that the system will not be ready to meet the card networks' arbitrarily-set mandate for the liability shift in October 2015," stated the letter from Leslie Sarasin, president and chief executive of the Food Marketing Institute.
Hannah Walker, director of government relations for the FMI, told the WSJ that -- as of April 2 -- her group had not received a response to its letter. She added that the delay request is not at all indicative of a lack of commitment on the part of the FMI.
The letter, according to the WSJ, states that merchants are currently experiencing a 16-week delay for delivery of updated equipment that is required to accept chip cards (which are more secure than traditional mag stripe cards).
Representatives for MasterCard and American Express told The Wall Street Journal that they do not intend to change the existing October deadline. (The WSJ did not receive an immediate comment on the matter from Visa or Discover.)
According to the WSJ, on Thursday (April 2), the National Association of Federal Credit Unions sent a letter to House Speaker John Boehner and House Minority Leader Nancy Pelosi that criticized the FMI's request and asked instead that U.S. lawmakers extend support for "strong data safekeeping standards" on the merchant side.