Transaction Trends

ETA CEO Jason Oxman was on Capitol Hill this morning testifying before the House Financial Services Subcommittee on Financial Institutions of Consumer Credit on the ways that ETA members and the payments industry are fighting fraud and expanding the use of FinTech to benefit consumers and merchants.  

During the testimony, Oxman unveiled the 2018 update to ETA’s Guidelines on Merchant and ISO Underwriting and Risk Monitoring. The Guidelines provide a basis for payments companies to work cooperatively with federal regulators and law enforcement toward the common goal of stopping fraud. 

“For both back-end networks and systems, as well as consumer payment products, payments technology firms have heavily invested time and resources into ensuring data security,” Oxman said in his testimony. “The rate of fraud on payment systems is at remarkably low levels thanks to due diligence programs to prevent fraudulent actors from accessing payments systems.”  

In 2016, there was nearly $6 trillion in debit, credit, and prepaid card transactions in the United States, but there was only $9 billion in fraud, a fraction of a percent of overall transactions.  Consumers are not liable for fraudulent charges, so payments companies have a powerful incentive to continue the battle against criminal fraud. In addition, a recent survey of ETA members indicates that more than 10,000 merchants were discharged last year for fraud.  ETA worked closely with industry leaders and federal regulators like the Federal Trade Commission (FTC) to update ETA’s Guidelines which prioritize security and risk mitigation. New additions to the Guidelines include best practice updates that incorporate the Financial Crimes Enforcement Network’s new beneficial ownership rule.  

ETA and its member companies share a commitment to protecting consumers from harm and will continue to push for sensible policies and encourage policymakers to take a collaborative approach with our industry,” Oxman told Congressional lawmakers. “Operation Choke Point, for example, employed the wrong legal tools, was unnecessary confrontational, and created serious risks to law abiding processors and merchants without producing any benefits to consumers.  The blunt force of Operation Choke Point discouraged banks and other financial services providers form forming relationships with merchants or other business in certain retail categories, leading to the ‘de-risking’ of entire industries.” 

Oxman fielded several questions from House Financial Services Committee members including Rep. Roger Williams, Rep. Keith Ellison, Rep. Al Green and Rep. Roger Pittenger. During the hearing, Oxman emphasized the importance of FinTech products and services in bringing financial services and commerce to underbanked and underserved consumers and merchants. He asked Congress to support collaborative policies that encourage the deployment of these technologies and discourage regulatory overreach that harms consumers.

Oxman also submitted written testimony. Click here to read Oxman’s written testimony, and click here to watch the full hearing.