Thanks to Texas legislators, Lone Star merchants will soon be able to decline card purchases without ID

FILE - In this March 5, 2012, file photo, consumer credit cards are posed in North Andover, Mass. The three largest credit reporting agencies will change the way they handle records in a major revamp long sought by consumer advocates. The changes were announced Monday, March 9, 2015, after talks between Equifax, Experian, TransUnion and New York Attorney General Eric Schneiderman. (AP Photo/Elise Amendola, File)

Starting January 1, Texas merchants will be able refuse credit and debit card transactions if a buyer doesn’t show photo identification.

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The purpose of the law, according to its author, is to cut down on debit and credit card fraud:

“I think most people, like me, were surprised that merchants cannot already do this,” state Sen. Bryan Hughes, R-Mineola, who wrote the bill, said in an interview. “The intent of the law is to give Texas businesses the right to take this common sense step of asking for an ID for a credit card transaction.”

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Some leaders in the credit card industry favor the law, as it seeks to limit the losses banks and card issuers incur when fraudulent transactions are processed:

“We end up taking a lot of losses,” Kevin Monk, executive vice president and chief operations officer at Sulphur Springs-based Alliance Bank, said in an interview. “One card breach can have a significant impact.”

For those who may oppose the new legislation, supporters argue the bill is merely an option for merchants, not a requirement to decline card transactions without photo ID.

This option is due in part to the contracts with many credit card issuers, who maintain such agreements prohibiting merchants from declining transactions if the customer refuses to show ID.

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However well-intentioned, the measure is not without its detractors still:

Keith Strama, a lobbyist for Visa, said the law would be confusing to retailers.

A lobbyist with a state retailers association also claimed the law could be used to discriminate against customers, as it puts the responsibility in the hands of clerks to determine who should be checked for ID before making a purchase.

What do you think?

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