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of protected consumer financial information to third parties (like Street Journal, Equifax spent over $1
marketing partners) and consumer rights to opt out of such transfers. million last year lobbying against
• Impose strict data security requirements for credit reporting agencies, several federal legislative initiatives
and require the FTC to approve those security plans. that would impact the company,
including those related to data
• Have the FTC and CFPB study the need for any new rules necessary to security and breach notifications.
protect financial information maintained by credit reporting agencies
and other businesses. A Congress that lacks the conviction
to take on complex and controversial
It will be interesting to see how Equifax reacts should Congress muster the issues like health care, the federal
will to take on data breach legislation. According to a Sept. 11 report in the Wall budget and tax reform, however,
may also lack the gumption to take
on the task of legislating federal data
security standards and procedures.
It is also worth noting that Sen.
Menendez is currently fighting
corruption charges in federal court,
so he may not be in a position to
push the legislation.

Implications for card payments
Everyone in the electronic payments
space should be concerned about this
situation because, as we know all too
well, breaches of private consumer
financial information are a leading
contributor to payment fraud.

Consumers understand this. Among
those participating in a recent
survey sponsored by the ATM
company Cardtronics, 84 percent
said they are worried about data
security. That's one reason why
many use cash. Ninety-one percent
of those surveyed reported they had
made cash payments in the previous
six months; debit cards were used
by 72 percent, and credit cards
by 68 percent of those consumers
surveyed.

Cash charts especially high usage
among consumers when they make
small-dollar purchases, said Brian
Bailey, Cardtronics Managing
Director for North America. Fifty-
five percent of those surveyed prefer
cash for purchases under $20.

Bailey isn't convinced incidents like
the Equifax breach will spur greater
cash usage at the expense of cards.
"There's an innate security risk with
any payment method," he said. I
suspect, however, it may render more
difficult initiatives for migrating
small-dollar cash purchases to cards
and other electronic options.

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