Many of America's small businesses still aren't EMV compliant, and on Wednesday members of the House of Representatives Small Business Committee asked why.
"Unfortunately, this transition seems to be catching many people off guard," Chairman Steve Chabot (R-Ohio) said.
State Department FCU President/CEO Jan Roche testified at the hearing, as did Electronic Transactions Association Government Affairs SVP Scott Talbott and TCM Bank President/CEO Paul Weston.
State Department FCU, headquartered in Alexandria, Va., has $1.7 billion in assets and 69,000 members.
Visa VP of Risk Products Stephanie Ericksen, who also testified, told the committee Visa first announced the liability shift in August of 2011.
Ericksen also said Oct. 1 marked "the beginning of a process" and that based on EMV transitions in other countries, it could take the United States two or three years to reach a point at which 60%-70% of transaction volume involves a chip card at an EMV terminal. Criminals may try to make a "last run" at card-present fraud until then, she said.
Ranking Member Nydia Velazquez (D-N.Y.) asked Ericksen when Visa would reduce its interchange fees in response to the anticipated drop in fraud.
"The only statement that I have is the interchange fees are very competitive," Ericksen said.
Between war stories about their own card and banking experiences, a dozen committee members also asked about everything from terminal costs to outreach efforts.
For Roche, who testified on behalf of NAFCU, the hearing was also a chance to ask for action on H.R. 2205, the Data Security Act of 2015.
"There is always going to be something else coming down the pike," she said. "The best way to protect consumer data and protect payments systems and keep that fully functioning is to have national data security standards in place."
The bill, introduced on May 1, would require individuals and companies to implement safeguards against data breaches and provide notifications when one occurs. It is currently with the House Subcommittee on Commerce, Manufacturing and Trade. A similar bill was introduced in the Senate on April 15 and is also in committee.
During questioning, Talbott noted that about half of all card fraud is currently committed in-store. And because many cards will still have magnetic stripes, criminals may still steal card data and use it online, though another new technology—tokenization—could thwart that, he noted.
"We'll build a 10-foot wall and crooks will build an 11-foot ladder," he said.
Rep. Chabot said merchants and retailers will testify before the committee at another EMV hearing in a few weeks.
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