California senate to vote on statewide EMV mandate

The California state senate is advancing a bill that would require California-based bankcard issuers and retailers to adopt Europay/MasterCard/Visa (EMV) chip card technology. The bill, SB 1351, mandates April 1, 2016, as the date by which the processes of those two constituencies be able to support EMV-based transactions.

The bill, sponsored by California State Senator Jerry Hill, D-13th District, and introduced in March 2014, passed out of committee on May 6 and may be voted on by the full senate as early as tomorrow, May 22.

The bill initially mandated Oct. 1, 2015, as the deadline for EMV implementation, which is the date set by Visa Inc. and MasterCard Worldwide for retailers to be EMV complaint or face potential fines in case of fraud. The bill also makes exceptions for small retailers and convenience stores/gas stations; they have until Oct. 1, 2017, to transition to EMV.

Additionally, the bill specifies that any contracts entered into by financial institutions and card brands on or after Jan. 1, 2015, would have to include the provision that any new or replacement cards issued after April 1, 2016, be EMV compliant. The rationale for the bill comes from oft-cited evidence that EMV cards substantially reduce fraud.

In April 2014, Sen. Hill stated, "My legislation holds all stakeholders accountable to protect consumers from scam artists who use fake cards to game the system."

The Electronic Transactions Association, however, does not see the issue the same way. "Passing a single state technology standard will open the floodgate to additional state responses and create an expensive, unsafe and inefficient myriad of technology standards," the ETA said.

The ETA is urging payment professionals in California to contact their legislators and let their opinions be heard.

Editorial Note:

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