New Decade, Lingering Issues

New Decade, Lingering Issues
Kathy Hanna Sr. Director, Enterprise Payments & Store Support Enterprise Payments Dept. The Kroger Co.
Mar 5, 2020

It’s the beginning of a new decade, and there is a feeling of excitement within the Board of Directors that MAG will continue to be on the forefront of the merchant’s voice in the payment industry.   As we enter this new decade, I’m honored to be writing you for the first time as the Chair of the outstanding MAG board.

At the beginning of the last decade, MAG was a small group of merchants with only thirty-six members, but the organization was growing.  Regulators, payment service providers, card brands and non-member merchants began to know MAG as the “go to” destination to be educated about merchants’ issues related to accepting and processing payments.   Several of the changes that shaped today’s merchants’ payment cost and customer experience was shaped by MAG’s voice of the merchant.  The passage of Reg II or better known as the “Durbin Amendment” and implementation of EMV in the US market were two of the biggest changes in the industry.  Let’s start with Durbin.  MAG, along with member merchants, made numerous trips to Capitol Hill and met with congressional members to educate them on the issues involving the cost of accepting debit cards.  Even after the passage of the Durbin Amendment as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in Congress, the work was not done.  

MAG met with the Federal Reserve Bank multiple times and responded to requests for input on implementing the wording of the law to support the interests of merchants.  Shortly after the law was enacted in the market, the announcement of EMV coming to the US market was made.  Again, MAG immediately worked to ensure the merchants’ interests were heard and protected.  Having the Common AID, an alternative to the Global Brand AID for debit cards, that protected merchant’s routing rights, has been just one of the success stories MAG was on the forefront of.  There are many other examples, but these are two issues where MAG’s as voice of the merchant was an integral part of enabling and shaping merchant payment cost acceptance. 

Here we are entering a new decade, and some of the lingering issues from the past decade persist, including routing rights, acceptance technology, and rules, even as merchants continue to expand payment options that support the customer experience they want to provide.  Our customers want to shop in ways that fit their needs, such as brick and mortar stores, buy online pick up at store (BOPS), buy online ship, pay with mobile devices from contactless to QRC codes, pay from a car, pay using biometrics, and whatever technology the future brings.  Today, our membership operates within a global economy across multiple business lines, ecommerce, transportation, restaurant, fuel, grocery, entertainment - just to name a few - that require interoperability for payments technology, security, privacy and multiple regulations. All of these must work seamlessly together while providing a great customer experience. It’s not an easy task.   Since its inception, one of MAG’s top goals has always been to understand these complex issues and work to ensure the merchants’ voice is a key part of the decision-making process by regulators, card brands and payment service providers.

As the Chair of the MAG board, I’m excited about the continued initiatives MAG is driving, such as education as well as our new initiative, global expansion.   Both have the same goals, ensuring the merchants’ voice is heard and merchants are sitting at the table with issuers, card brands, technology providers, regulators, and others when shaping the payments future.   This decade begins with MAG bigger and stronger with a membership of 167 merchants.  The issues look to be as challenging as the past, and MAG will be right there on the forefront providing the merchants’ voice.

The Merchant Advisory Group

Driving positive change and innovation in the payments industry that serves the merchants interest through collaboration, education, and advocacy.