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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). Merchants get almost nothing to reduce the fraud that they get stuck with on lost and stolen card fraud since many of the banks don’t even want (or embarrassingly cannot) to provide on-line PINs on purchases routing through the signature networks. This prompts a new acronym, ROseI, or “return on somebody else’s investment”. Issuers get the return and merchants get to make the investment. Now, if that’s not MAD, what is?