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 The National Retail Federation delivered a shot on Tuesday, saying
in a letter to U.S. lawmakers that its bank "partners" had failed to
adopt new technology and instead continued to issue "fraud-prone"
magnetic stripe credit and debit cards.
On Wednesday, the Independent Community Bankers of America
representing about 7,000 banks in small towns, big cities and
suburbs, fired back, saying the NRF should focus on its response to
theft of data "rather than hurling false allegations blaming the
banking industry."
ICBA members hold $1.2 trillion in assets, $1 trillion in deposits,
and $750 billion in loans to consumers, small businesses and the
agricultural community. The NRF represents a range of merchants in
more than 45 countries.
"Retailers and their processors — not banks — are responsible for
the systems in their stores that process payment cards," ICBA
President and Chief Executive Officer Camden Fine said in a
statement.
The exchange ratcheted up an already heated dispute over who should
shoulder responsibility for cyber attacks.
Target Corp, the No. 3 U.S. retailer, disclosed in December that it
was victim to one of the biggest credit card breaches on record.
Target said it ran for 19 days during the lucrative holiday shopping
season, with data compromised in the records of about 70 million
customers.
Privately-owned luxury retail chain Neiman Marcus has said it too
was victim of a cyber attack and sources have told Reuters other
retail chains have been hacked.
U.S. banks and retailers face an October 2015 deadline imposed by
payment networks Visa and MasterCard to switch to new cards that
use computer chips to store information rather than magnetic strips. Each group wants the other side to pay for the upgrades.
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Industry experts and some executives, however, hoped the data
breaches would spook the firms enough that they would speed up
efforts to implement the new technology.
"This might be a chance for retailers and banks to for once work
together as opposed to sue each other like we've been doing the last
decade," JPMorgan Chase chief executive Jamie Dimon said last week
when he was asked about the issue during an earnings conference
call.
National Retail Federation President Matthew Shay, in the letter to
lawmakers, took a swipe at banks for "putting sensitive financial
information at risk" for years with the more traditional cards
"while simultaneously touting the security benefits of next
generation 'PIN and Chip' card technology for customers in Europe
and dozens of other markets."
The bank group said on Wednesday that the technology would not have
prevented last month's breaches. ICBA has argued in previous letters
to lawmakers that the party that suffers the breach bears
responsibility.
(Reporting by Emily Stephenson; editing
by Grant McCool)
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