In the News
Daily News: IDNYC Payment Cards Coming Soon, Brought to You by New York’s Mastercard-Connected Deputy Mayor
By Alyssa Katz and Jillian Jorgensen
A new plan for putting banking smart chips in New York City IDs has advocates terrified that City Hall is inadvertently creating a backdoor for the feds to go after undocumented immigrants.
And that’s not the only thing that’s fishy about the proposed IDNYC card modification.
The Daily News has learned that the initiative is being overseen by a deputy mayor with ties to financial services giant MasterCard.
The municipal ID is widely used by undocumented New Yorkers who need a form of identification — prompting a dozen groups involved in creating the card to demand the mayor put the chip on ice to protect cardholders’ personal information from exposure to federal immigration authorities.
“Given the Trump administration’s ongoing assault on immigrants, including heightened threat from Immigration and Customs Enforcement (ICE) and other Department of Homeland Security (DHS) agencies — not to mention the long list of data breaches in the financial services arena — there is clearly a tremendous amount at stake for New Yorkers with this proposal,” wrote the NYCLU, New Economy Project, New York Immigration Coalition, Lower East Side People’s Federal Credit Union, Brooklyn Cooperative Federal Credit Union, Immigrant Defense Project and other groups to Mayor de Blasio on Dec. 26.
Despite those concerns, the chip project is moving ahead under Deputy Mayor Phil Thompson — who The News has learned was previously paid to issue reports for MasterCard on the benefits of such banking cards.
A City Hall spokesperson won’t say which firms responded to two city solicitations last year seeking interested companies . MasterCard did not respond to a request for comment.
Whichever debit-card platform wins the bid will cash in big from transaction fees charged to merchants and banks.
While a professor at MIT, Thompson penned “The Technology to Advance Equal Financial Opportunity: How emerging electronic payment technology can provide financial services to underserved communities” for MasterCard, through his consulting firm NextShift. He was paid $15,000, according to his recollection, by the public relations firm Statler Nagle, where a former Dinkins administration colleague worked.
“He called me and told me that they wanted someone to do some research comparing different card products for the low-income community and they needed somebody who has a reputation for being independent, skeptical, critical, whatever, because this needed to be trustworthy,” Thompson said.
He says he agreed to do the study because MasterCard would have no editorial review over it.
Thompson went on to serve as an unpaid member of a MasterCard advisory board and wrote op-eds touting the potential of banking cards to financially empower African American communities. He was also involved in related conversations about the creation of a “BronxCard” debit card, which never launched.
The deputy mayor acknowledged his MasterCard efforts present the appearance of a conflict of interest.
“I don’t think real conflict, but appearance of conflict, yes, and so I have not engaged in any of the actual procurement decisions or processes,” he said. “I’ve kind of walled myself off of that precisely anticipating you might show up one day and ask questions like this.”
Thompson said his work for MasterCard was part of his longtime efforts to help protect black and Latino people from a $170 billion predatory finance industry.
Immigrant Affairs Commissioner Bitta Mostofi said empowering underserved communities is one goal of adding financial services to IDNYC.
Thompson joined the administration in February 2018 — a few months before the city first asked for smart chip pitches. But Mostofi said the idea was first explored during IDNYC’s creation in 2014. In 2016, a survey of cardholders showed that “one of the number-one challenges was banking access,” she said. And in 2017, a the city hired a consultant to study a smart chip for IDNYC, she said.
Banking chips are expected to be optional for IDNYC card-holders, and Mostofi said the city was asking potential payment-card partners how they intend to safeguard IDNYC card-holders’ personal information.
Card-holders would get a discount on sending money abroad, and a certain number of free withdrawals, but could still could be charged fees for some transactions. A possibility the chip will enable IDNYC card-holders to borrow small sums also worries the groups that wrote the mayor, which warned “this could make IDNYC cardholders vulnerable to high-cost loans and other abuses typically associated with card-based lending.”
Mostofi said she is taking the concerns seriously, and is pursuing an expedited bidding process not to rush but to have a “robust back-and-forth” with companies to see what they can offer on privacy and security without being locked in to moving forward.
“If it’s going take us longer to see what we want to see, great,” she said. “If we feel like we’re not going to get what we want to get out of this then we’re not bound to it.”