HOUSE OF REPRESENTATIVES	H.C.R. NO.	182
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII

HOUSE CONCURRENT

RESOLUTION

Supporting the adoption of CHIP and PIN technology by all financial institutions to improve the SECURITY of consumer financial transactions in the state.

     WHEREAS, the chip and PIN card is a form of smart payment card that stores the payment card's information on a chip, rather than a magnetic stripe like a conventional credit or debit card; and

     WHEREAS, chip and PIN technology is currently used by major banks employing the Europay, MasterCard, and Visa technology in their credit and debit card products; and

     WHEREAS, chip and PIN cards must be inserted into a card reader where the card chip creates a transaction code unique to that purchase, which employs an extra level of encrypted security to the card's information; and

     WHEREAS, chip and PIN cards are much more secure than magnetic-stripe cards because the information disclosed from a sales transaction cannot be used to make additional purchases; and

WHEREAS, a single fraudulent transaction resulting from the theft of magnetic-stripe card information can cost a cardholder thousands of dollars; and

     WHEREAS, United States card issuers are migrating to the chip and PIN technology to protect consumers and reduce the cost of fraud; and

     WHEREAS, on October 17, 2014, President Barack Obama issued an executive order requiring executive departments and agencies to transition payment processing terminals and credit, debit, and other payment cards to employ enhanced security features, including chip and PIN technology; and

     WHEREAS, financial institutions have been reluctant in replacing the estimated 1,200,000,000 magnetic-stripe debit and credit cards with chip and PIN cards due to the costs, which are estimated at about $3.50 per card; and

     WHEREAS, some retailers have also expressed reluctance in upgrading or replacing the estimated 12,000,000 point-of-sale terminals to accept chip and PIN cards, however the technology is becoming an accepted standard in many businesses due to consumer demand; now, therefore,

     BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2016, the Senate concurring, that the Legislature requests that all financial institutions that issue credit or debit cards to Hawaii residents or businesses replace those cards with chip and PIN cards; and

     BE IT FURTHER RESOLVED that all Hawaii businesses that accept electronic payments are requested to upgrade or replace their point-of-sale terminals to accept payment by chip and PIN cards; and

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Commerce and Consumer Affairs who in turn is requested to transmit copies of this Concurrent Resolution to the five largest financial institutions that issue credit or debit cards and the ten largest retailers in the State.

OFFERED BY:

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Report Title: 

Chip and PIN Cards; Chip-and-PIN Cards; Electronic Payment; Credit Cards; Debit Cards; Security