The MAG Quarterly: Volume Two, Issue One
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Mark Horwedel

Letter from the CEO

By Mark Horwedel

The MAG responded to news of recent breaches involving payment card data in a public release dated January 13, 2014. The MAG felt compelled to respond in light of what we felt were biased or uniformed reports by many in the media to the effect that merchants were primarily to blame for the breaches. In our release, we attempted to point to the fraud-prone nature of today’s payment cards as the core issue needing to be addressed. We continue to believe the payment card industry needs to move away from mag-stripe and signature in order to best protect against fraud and that merchants are just as much victims of the present system as the customers we all wish to protect.. Read More

Board Member Corner

What are the Total Costs of Payment Acceptance for Your Company?

By Dean Sheaffer, SVP Financial Services/Chief Compliance Officer, Boscov’s

Many merchants do not have a complete understanding of the total cost of payment acceptance for their business. While payments may be esoteric to a merchant's core business (buying and selling goods and services), the costs of various payment methods vary widely and often equal or exceed a merchant's bottom line profit. The payment process is also integral to the customer experience. Knowing the component costs of each payment method in each of your payment channels allows you to make better investment decisions to help reduce costs and improve the customer experience. These are also the same cost components that a merchant wants to consider when negotiating a new processing contract. It is also noteworthy that in some cases merchants may have the opportunity to steer customers towards lower cost methods of payment.  Read More


2014 Mid-Year Conference a Success

Nothing can hold back the MAG!

The MAG 2014 Mid-Year Conference held February 11-13th in Atlanta, GA, was a success despite the 100-year Atlanta winter storm. The conference showed record attendance with over 200 attendees from cross industry verticals. The conference content focused on the two themes of preventing card fraud and examining new innovations in payments. MasterCard’s EMV technical expert, Guy Berg, conducted a pre-conference class on EMV and innovations expert and long-time payments consultant and John MacAllister with Dorado Industries, introduced attendees to many of the most interesting and disruptive payments innovations. Despite the weather challenges, MAG members and sponsors focused on the conference content and not the weather. We are grateful to them for their attention to the agenda and willingness to maintain their good nature in spite of travel delays. Be sure to mark your calendars for the MAG 2014 Annual Conference, September 16-18 in sunny Ft. Lauderdale. Read More

MAG Encourages Focus on Comprehensive Solution for Payment Fraud

Minneapolis, January 13, 2014- More than a year ago, the prominent payment card networks released their U.S. EMV roadmaps. During the intervening months, the roadmaps have been criticized as both too aggressive and too lax. Mixed messages have accompanied the releases. One of the networks has made public statements that payment card fraud is at an all-time low, which begs the question: Why are banks and merchants being asked to spend an estimated 8 billion dollars1 on the implementation of EMV?
In the wake of the sensational reporting surrounding recent data breaches, one of the networks has reasserted its EMV roadmap, including the dates for shifting liability for counterfeit fraud to merchants that do not want to spend scarce resources, to convert to EMV. Their plans are lent credibility by a chorus of self-proclaimed experts who all stand to profit from the EMV conversion.

Does EMV help to prevent fraud? Absolutely.
Should the United States be working to move from magnetic stripe to chip-based smart cards? No question.
Unfortunately, the networks’ EMV roadmaps will steer us down a road littered with potholes.

Merchants are painfully aware of the costs of breaches of payment card data as well as the costs of complying with the unilateral PCI “standards” imposed upon merchants by the networks. Unfortunately, these are the consequences of merchants accepting the networks’ outdated and fraud prone payment card products. Merchants welcome the opportunity to do something about the problem and are willing to make the sizeable investments necessary to protect the payments ecosystem from the deficiencies inherent in today’s payment cards.

  Read More

By Jeff Chen, Vice President, Business Development

I am proud to have had the opportunity to present the AnyWhereMobile Payment Network (AWM) at the MAG 2014 Mid-Year Conference. MShift’s ambition is to calm the interchange waters between issuers, merchants, and payment networks through innovation, rather than litigation and legislation. The blended per transaction debit interchange pricing that was presented represents a 50% reduction from today’s debit interchange rate.

  Read More


MAG Member Corner

A Retailer’s Perspective on Proposed Payment System Security Enhancements

By The Home Depot
Payments Team

In light of the recent data breaches at fellow merchants, there is a heightened focus on security and fraud in the payment industry and beyond.  Even government entities are inquiring, investigating, and likely considering further regulation.  Unintentional, ill-informed decisions by any of the stakeholders could lead to significant work and investment with little impact on fraud.  For that reason, it is essential to understand the benefits, limitations and consequences of any approach relative to the critical objectives.
It is important to first be clear regarding the fundamental objectives required to significantly advance data security and reduce fraud:

  • OBJECTIVE #1: Protect data obtained from the consumer during a transaction (i.e., card #, PIN, etc.)
  • OBJECTIVE #2: Establish payment industry card acceptance processes that hinder or further prevent the use of fraudulent payment data, in order to reduce fraud costs

Read More

MAG Sponsor Spotlight

Denial is not a river in Egypt...

By Peter Forbes, EVP - National Business Unit
RBS WorldPay, Inc.

I was invited to give a keynote speech at the Strategic Leadership Forum of the ETA last month in Scottsdale. As one of the original eight members of the Bankcard Services Association (BSA - the former name of what became the ETA) formed in 1988 and as its first Vice-President, I thought the ETA members present might enjoying hearing a little history about the formation of their organization that I don’t believe they had ever heard. Read More


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