The MAG Quarterly: Volume Two, Issue Two, June 2014
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Mark Horwedel

Letter from the CEO

It's a Mad Mad Mad Mad (Payments) World

By Mark Horwedel

It's not just that Visa's mad at Walmart and Walmart's mad at Visa. Everybody connected to payments is mad at everybody else; and, it seems to be getting worse!

And, it's not just mad in the sense that people are losing patience with each other. It's mad because it's got to be one of the weirdest business systems in the world. Ever hear of another situation where the buyer has to protect the seller from deficiencies in the seller's product? Would you buy a car from GM if you had to pay to fix their design deficiencies. I give you PCI!

Now we've got EMV implementation. What a great deal for merchants who get to spend 4-5 times what it will cost banks to reissue their cards. At least banks get some return by way of reducing fraud from counterfeit cards (which they allegedly eat today)

Read More

Board Member Corner

Crazy World of Petro

By Tim Patterson, Alon Brands

Imagine for a moment that you are a business owner and the primary product you sell is a product that everyone needs, but is extremely competitive, driving the profit margin down to less than 4%. Now imagine that in order to sell that product, you have to accept some form of credit card, which typically takes 1.75% to 2.50% of your sale. Hypothetically, let's call that product "gas". Just to help you build your business case for selling that product, let's put a number to this product, and call that price $3.50 per unit, with a $0.12 profit margin Read More

Chris Gardner

A Mobile Wallet Day in the Life

By Chris Gardner
co-founder, Paydiant

Imagine this: On a sunny spring day, Jen, a 36 year-old wife and mother, puts her kids on the bus for school and leaves her suburban home for yet another busy day. Her first stop is the gas station to fill-up her SUV. She used to go wherever was convenient during her day, but now she makes a point to fill-up at stations in one specific chain because their new smartphone app gives her $.10 off per gallon when she uses the app to operate the pump and pay using her stored checking account information. It's a less expensive proposition for both the fuel station operator and Jen as the company pays less to process Jen's payment and Jen gets to share in the savings through discounted gas prices Read More


MAG 2014 Annual Conference
Registration Now Open!

The MAG annual conference is the only payments conference consisting of cross-industry merchant companies making it a must-attend event for those in the payments industry. The conference will feature educational sessions covering hot topics such as eCommerce, mCommerce, Fraud, and CyberSecurity, as well as insights from top Acquirer Executives. If you work in the payment industry, this conference is for you!

Register Today!

"It is essential that all stakeholders across the payments spectrum meet to address issues that impact our respective industries the MAG provides that forum. It is one of the few organizations where merchants and the payments industry collaborate on developing "best practices" and drive out inefficiencies in the payment ecosystem."

David Hogan, Executive Director, Heartland Payment Systems, MAG Elite Sponsor Since 2012

WEBINAR - Where are Mobile Payments Heading?
A View from the Federal Reserve - June 18, 2014
Register Today

Take advantage of valuable payments education

MAG members have access to past webinars, educational sessions and recordings. Please contact the MAG if you need your log-in information.

Discover the MAG Advantage

mag brochureEach MAG member should have received a copy of the newly created MAG membership brochure, which highlights member benefits, educational opportunities, and why merchants view their MAG membership as an important business asset. Feel free to use this tool to recruit fellow merchants in making the MAG a part of their business strategy. If you would like additional copies of this brochure, please contact the MAG and we will be happy to mail them to you.

The MAG Announces Staff Addition

LizThe Merchant Advisory Group, the MAG, is pleased to announce Liz Garner has joined the MAG staff in a newly created role as Vice President. Liz has held positions with both the National Restaurant Association and with the Food Marketing Institute. Liz brings to the MAG her considerable experience in advocating for merchants as well as a strong payments background. Read the full press release.

Collaborating on Operational Issues

by Dean Sheaffer, Boscov's

At the next MAG annual meeting [September 16 - 18 in Ft. Lauderdale] an important, new discussion will take place.  The MAG will invite the card brands to discuss a compendium of merchant suggested operational improvements.  To our knowledge no other organization has collected and prioritized the great ideas for operational improvements we hear from merchants every day this will be another industry first for the MAG.

Note that the purpose of the discussion with the card brands is to move forward our mutual promise of collaboration to improve the payments ecosystem. Therefore, suggestions should be purely operational and should benefit the payment system as a whole or a significant stakeholder group or industry segment.

Suggestions will include topics such as:

  • Multiple Settlements against a single authorization (critical for merchants fulfilling from multiple locations)
  • Real time authorization reversals for returns, voids and cancellations
  • Standardization of Chargeback reason codes
  • Elimination of merchandise related charge back reasons for merchants with robust return policies

Feedback Requested - Read More


New MAG Bench Marking
and Best Practices Initiative

by Dean Sheaffer, Boscov's

The MAG communication committee is embarking on an important new initiative and would like your input.  Historically there has been very little payment systems benchmarking data or a source for payment systems best practices in the merchant community.  As a result, it is difficult at best for even the largest merchants to understand what they are doing well and where they can improve.  The MAG proposes to remedy this through a series of data / information gathering surveys.  The data collected from member surveys will be aggregated and made anonymous so that we will mitigate the risk of individual company's information becoming public.

Feedback Requested - Read More


MAG Member Corner

Stored Value Cards
More than a one time gift

By Kate Jaspon
Dunkin' Brands, Inc.

Dunkin' Brands Group, Inc., is the parent company of two of America's most recognized brands, Dunkin' Donuts and Baskin-Robbins. Dunkin' Brands' nearly 100 percent franchised business model includes more than 7,700 Dunkin' Donuts restaurants and nearly 2,500 Baskin-Robbins restaurants in the U.S. alone. Dunkin' Donuts has a more seasoned gift card program and recently launched two exciting initiatives that utilize the Dunkin' Donuts Stored Value Card (DD Card) in a powerful way. These two initiatives, including the launch of a mobile application and a rewards program, are designed to reinforce Dunkin' Donuts' coffee and breakfast leadership and support the brand's steady, strategic growth. As a franchisor, we are always looking for ways to improve our restaurants profitability. For Dunkin' Donuts, a stored value card serves not only as a low cost payment mechanism, but it also serves as a powerful marketing tool that increases one-to-one marketing while enabling operational efficiencies. These are the primary reasons why we have chosen to put our stored value card at the forefront to help reduce the total cost of payment acceptance.

As small ticket merchants, our franchisees have been impacted by the increased cost of payment acceptance since the Federal Reserve authorized an increase in our costs under Reg II.

Read More

MAG Sponsor Spotlight

Mobile Payments 2.0
The new Mobile Payments: Practical, Cheap and Secure

by George Wallner
LoopPay Inc.

Despite powerful support from the major players and huge amounts money spent on it, NFC based mobile payments have not taken off.

Now there is a movement to change how mobile payments work, making them simpler, better and cheaper. There are also new technologies that take the pain out of merchants supporting mobile payments.

Magstripe and Smart Cards

For 15 years EMV, a secure smart card technology has been available to the US payments industry. It was ignored because we had a low cost real-time on-line authorization system - the most comprehensive in the world - that kept fraud under control, as long as the card data could be kept secret. Keeping card data secret is not an easy feat, however, as the same card data that needs to remain secret must also be provided in every transaction. As criminals got smarter they were able to steal not only card numbers, but entire card track data. (Of course, requiring a PIN with every card, including credit, would solve most of the security problem, but that is another story) Interest in the US in EMV is up, and with some justification.

Read More


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