Month: February 2016

(credit: The Strawhecker Group)

This week a management consulting company called The Strawhecker Group (TSG) released the results of a study that found that only 37 percent of US retailers were ready to process chip-embedded credit and debit cards. The slow adoption of chip-embedded cards leaves merchants open to accepting liability for fraud perpetrated with traditional, less-secure magnetic stripe cards.

The US officially migrated over to the so-called EMV standard (eponymous for Europay, Mastercard, and Visa, the companies that developed the standard) in October 2015, and at that late date, it was one of the last countries to make the shift. The upgrade in technology has forced card issuers to send out new, chip-embedded cards to users (which still have magnetic stripes to complete transactions on now-"legacy" magnetic stripe terminals). It also required merchants to upgrade their terminals to be able to accept the new credit cards. Credit card networks like Visa and MasterCard instituted a liability shift in October to get merchants to speed things up on their end—either upgrade your terminals or you’re liable for any fraud that happens with a card that could have made a transaction using the chip technology.

The liability shift was in the works for years, with President Obama even signing an initiative called “BuySecure” to speed the adoption of EMV in the US. But despite that high-visibility endorsement, the major card networks have failed to get many mom and pop stores to understand what they have to do to be compliant, and even big-name retailers have struggled to find a cost-effective way to roll out new terminals. Part of the problem, too, has been that big terminal manufacturers weren’t ready to roll out EMV-compliant terminals on October 1. (Startups like Square even offered to cover any liability its customers might incur between the October 1 deadline and whenever the new terminals arrived.)

(credit: Defense Distributed)

Last Thursday, the Brady Center to Prevent Gun Violence stepped into a notable legal battle between Defense Distributed, a group that promotes gunsmithery via 3D printing, and the State Department, which aims to halt re-publication of the relevant CAD files.

Brady Center is arguing in favor of the government, while the Electronic Frontier Foundation is on the side of Defense Distributed. The lawsuit, Defense Distributed v. Department of State, centers on whether a website that publishes CAD files—which would enable foreigners outside the US to print a firearm—violates munitions export laws. While Defense Distributed took the files down three years ago, they have since reappeared on BitTorrent sites. The case remains pending in the 5th Circuit Court of Appeals in New Orleans, which has yet to schedule oral arguments.

"Not only is Appellants’ position reckless and hazardous to the safety of Americans at home and abroad, it is inconsistent with the U.S. Constitution," John D. Kimball, the Brady Center’s attorney, wrote in the new amicus brief. "The Second Amendment does not protect the export of firearms or their functional equivalent."