The grocer cites fines over the requirement to use PIN confirmation for debit card transactions
The lawsuits against Visa are piling up with Kroger filing its own suit against the financial firm this week over PIN debit card transactions, the Wall Street Journal reports. In its court papers, Kroger claims Visa has fined the company and threatened higher fees or discontinued use of Visa debit cards at Kroger stores if the grocer refuses to allow customers to use signature verification rather than a personal identification number (PIN).
Kroger’s lawsuit is the latest in a string of court filings against Visa. Last month, Walmart sued Visa citing a similar reason. A few weeks ago, Home Depot filed suit against MasterCard and Visa alleging antitrust violations related to the two card companies refusing to adopt more secure chip-and-PIN technology to keep profits and market dominance.
Kroger requires customer verification via PIN for debit card transactions, but Visa mandates that retailers must give customers the choice to use a PIN or signature. “Our goal is to provide our customers with a safe and secure payments environment, and two layers of protection are better than one,” said Chris Hjelm, Kroger’s executive vice president and chief information officer.
Starting in October 2015 with the EMV liability shift, Kroger rolled out approximately 54,000 new chip terminals in about 3,200 stores nationwide. When Kroger upgraded its terminals to prevent signatures for debit card transactions, Visa threatened to freeze Kroger’s acceptance of Visa-branded debit cards. “There is no rational basis for Visa to cut off Kroger’s ability to accept any or all Visa debit cards unless Visa intended to punish Kroger,” wrote the chain in the lawsuit.
NACS is educating Congress that PIN technology is a proven security solution—for both credit and debit transactions—available today. All EMV point-of-sale readers are PIN-enabled with encrypted security, and when PIN is required, whether a card number or the card itself is stolen, a PIN protects consumers against fraud. Policymakers in Washington have held several hearings examining the transition to EMV and the impact to small businesses, and NACS continues to educate legislators that chip-and-signature is not effective at protecting consumers without the additional security layer of PIN authentication.
The upgrade to EMV is a massive, estimated-$6 billion investment for the convenience and fuel retailing industry. Without the use of PIN, the investment in EMV technology falls short of providing customers with security against fraud. Learn more at PrivatePIN.com.