Blumenthal Demands Explanation of Retailers Blocking New Secure Mobile Payment Methods

Press Release

Today, U.S. Senator Richard Blumenthal (D-Conn.), Ranking Member of the Senate Committee on Commerce, Science, and Transportation's Subcommittee on Consumer Protections and Data Security, requested answers from the Merchant Customer Exchange (MCX) whose members have blocked use of new mobile payment systems. In a letter to MCX Interim CEO Brian Mooney, Blumenthal requested answers to reports that retailers have chosen to disable their payment systems in order to block new "tokenization" technology that may better protect consumers.

Blumenthal wrote, "I am concerned by reports that some merchants are banding together to deny consumers the option of conducting transactions with this new technology… A few days after the launch of Apple Pay, it was reported that some MCX members disabled their near field communication (NFC) terminals that had been in use for years to accept contactless credit card transactions, apparently in order to block consumers from using digital wallets that depend on the same NFC-enabled terminals. As a direct result, consumers are also being blocked from using more secure payment methods and required to provide potentially sensitive personal information to these merchants."

"The theft of financial records and personal information undermines consumer confidence and imposes unnecessary costs on consumers, businesses, and the economy. Consumers should not be denied payment options that protect their personal privacy and financial data, and businesses should not act in concert to stifle competition. Payment systems using tokenization have the potential to revolutionize commerce by reducing fraud, increasing privacy and security, and saving money for both consumers and businesses. To realize the many benefits of this new technology, all tokenization systems must be given a fair opportunity to compete."

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