Texas Wants to Require Photo ID for All Card Present Transactions

by Ben Jackson 0

A bill in the Texas State Legislature would require merchants to ask for photo IDs from anyone looking to make a purchase with a credit or debit card. The bill number is HB3522.

Sec. 604.153. REQUIRING PHOTO IDENTIFICATION FOR CARD TRANSACTION. (a) A merchant may not accept a card for payment in a point of sale transaction for the purchase of or adding value to a stored value card unless the merchant requires the individual who uses the card to provide photo identification verifying the individual’s identity as the cardholder. (b) Subsection (a) does not apply if the merchant requires the individual presenting the credit card for payment to provide the individual’s zip code to verify the individual’s identity as authorized by Section 505.002 or as to any card transaction, electronically enter the personal identification number (PIN) associated with the card.

The bill is essentially asking for multiple forms of authentication, but is it truly necessary. Prepaid cards are singled out for special scrutiny because a cardholder must provide ID to both load a card and make a purchase with a card. While most people would have their wallets with them and likely have ID to present along with their transactions, it will slow the shopping experience down and may make some shoppers uncomfortable.

One wonders whether the bill would drive people away from credit and towards cash and debit, since PIN transactions are also exempt. The bill passed the House on May 5.

Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group

The text of the bill can be found here
The bill status can be found here