MAG Insights

Best Practices. You may have heard this term a lot lately. The MAG published four Best Practice Guides in 2020. The guides were organized by a group of merchants, whose mission was to pull together considerations, recommendations and best practices on specific topics. There were many worthy topics in 2020 to deeply examine and assess. These are great resources for merchants who hear buzz words all the time like “8-digit BIN” and “Debit Routing,” but don’t have the full grasp on what that means, or what they should be doing to react to it.

In addition, there is another set of Best Practices the MAG monitors. They are broader and don’t focus solely on any specific subject. In fact, they inform and direct the entire strategy of the Collaboration Pillar. These are the Network Best Practices, and they are a constant living, breathing set of objectives that the merchants of the Collaboration Committee set out to achieve through collaborating with industry stakeholders to improve the landscape of payments to provide more transparency, instill more merchant input, and deliver an overall improved consumer experience at checkout and beyond.

Working together with the networks, we mapped the Best Practices into a roadmap that gives us a general timeline of when these priorities could be achieved. A great success story with the Network Best Practices Roadmap is the elimination of the signature requirement. This was a hot item for merchants back in 2017. Merchants argued that the networks’ requiring them to obtain cardholder signatures for purchases was an outdated and impractical “technology” in the 21^st century, particularly after mandating merchants upgrade point-of-sale hardware and software to support EMV transactions back in October 2015. Using the roadmap as a tool in conversations with industry partners, merchants successfully convinced networks of this, and Mastercard was the first to announce the elimination of this requirement beginning in April 2018, which was a huge step forward in improving both the merchant and customer experience.

On a biennial basis, we conduct a survey to ensure that the priorities outlined on the roadmap as being of high priority remain so in order to be agile to change in a fluctuating environment. We recently just concluded our 2021 survey to committee members and are excited to share with you some of the results. 

What Shifted in Priority?

There were several changes in priority from the 2019 to 2021 survey.

Several of these items directly correlate with merchants having choice – on routing, wallet acceptance, and how merchants choose to authenticate their customers. Over the past several years, we have embarked on several educational efforts to increase merchant knowledge on these topics such as the creation of a Debit Routing Community of Practice, the publication of a Routing Optimization Best Practice Guide, several webinars and conference sessions. This effort has clearly led to the increase in priority merchants place on these topics. Education has always been key for merchants to understand the impacts of industry mandates and rules to their business, and this increase in priority is evidence that merchants are investing the time and energy in the areas that have the potential for restricting how they transact with their customers. Furthermore, the increase in priority of processing reversals and releasing open-to-buy holds in real-time shows that merchants are increasingly hearing from frustrated consumers and would like to see more progress being made on these efforts across the industry.

Decreased from High to MEDIUM Priority:

2021 High Priorities

The below chart represents the roadmap best practices deemed to be of high priority heading into 2021.

Recap

The Collaboration Pillar’s goal is to identify, prioritize, and execute strategies to improve payments operational challenges most relevant to MAG merchant members. Further, it is to drive the merchant voice through industry participation and enhance payments partners’ accountability. This is achieved through alignment on the Network Best Practices Roadmap with merchants on an every-other-year basis to ensure that what we are working on with our network partners aligns with the challenges merchants face every day in operating their businesses.

Don’t see a particular priority of yours listed in the table above? Check out the full Network Best Practices Roadmap on the MAG Learning Center, and if you still don’t find it, get involved! Join the Collaboration Committee whose mission is to review, analyze, react to and work together to challenge what’s in the headlines every day in payments. Send me an email if you have a passion for improving the payments landscape and want to join the Collaboration Committee.