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Board Member Corner

The Visa forum held in Hollywood Florida May 12 – 15 sent mixed messages to the merchant attendees.

The central themes of the meeting were collaboration and transparency; a particular focus was Visa’s stated desire to collaborate with merchants. This is great news for merchants who have been asking for years to participate in planning for processes which fundamentally affect their businesses. Merchants should certainly welcome any opportunity to truly collaborate with the card brands on critical topics such as the content and timing of semi-annual releases and rules changes.

However, during a number of the sessions and panel discussions, Visa struggled to answer fundamental questions critical to merchant understanding of upcoming changes (e.g. whether chargebacks increased in Canada post conversion to EMV). They were also a bit obtuse when asked if they would participate in collaborative groups such as the CNP working group of the EMF. I think it would greatly advance Visa’s objective of collaboration and merchants’ perception of the card brands if they were to participate in such groups – I’m certain the merchants and other stakeholders would welcome their participation.

I do have a concern that I believe many other merchants share. Visa explicitly stated that they are interested in gathering merchant data -- such as whether an ecommerce transaction is for a customer “known” to the merchant and if the ship-to/bill-to addresses are the same - in support of an enhanced Verified by Visa product. Additionally Visa indicated that by using the VbyV session ID, they will be able to identify the originating (consumer) IP address and a wealth of other consumer device information. After the presentation I asked if they intend to seek SKU level data from merchants. The response was that they are already working with “some of the largest” merchants to risk score transactions using SKU data.

While I fully support any initiative that will reduce fraud and other expense in the U.S. Payment system, I am wary of sharing sensitive consumer data and even more concerned about sharing customer SKU level purchase data. This data is one of the most valuable assets any merchant possesses. I, for one, would need to understand a great deal more about how this data would be used, who would own the data, how it would be aggregated and many other related issues before I considered sharing it with others.

This is just one of many topics that would benefit from open and honest discussion between all parties responsible for maintaining the safety and soundness of the U.S. Payment System. Given the ever increasing pace of change in our industry, I would like to see the card brands and the merchants begin such discussions immediately.

Dean E. Sheaffer, Board Member, Merchant Advisory Group