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Letter from the MAG President: Educating the Technologist in Payment Space (MAG Quarterly- Volume Six, Issue Four)

By John Drechny, President, Merchant Advisory Group

December 6, 2018

For many years the technology around payment acceptance was stagnant, with the use of mag stripe as the primary form of authorization for decades. During this period, most payment professionals concentrated on bi-annual network updates or routing efficiency as key projects within their technical groups. Some even ventured into creating redundant processing relationships to add stability and leverage negotiating power. Over the last several years, however, the speed of innovations has changed considerably, and the use of technology to simplify the checkout experience has become a delight for customers.

With this change, some of the power between who manages the payment experience within a merchant has shifted as well. Now the decision on payment acceptance is most likely a shared responsibility between technology groups, customer experience teams, treasury departments, fraud prevention teams and even the c-suite. The influencers of these groups have also played an increasing role in the payment landscape with technology groups receiving programming advice from POS providers, payment integrators, and networks. Some of this advice has been ill-founded to advance processes which may not have been in the best interest of the merchant or its customers.

One recent example of this type of influence has been the deployment of debit routing screens which confused customers and lessened the merchant’s ability to route transactions to least cost networks. Many merchants found the deployment of these screens through either testing cycles or worst yet, when investigating a sudden decline in transactions being routed to preferred networks. As a result of the expanding influence it has become more apparent there is need for a new trusted source of education for all parties involved in the decision-making process around payment acceptance. 

To respond to this need, the MAG is embarking on a couple of new initiatives. The first is to explore and create a forum to educate technologists on the ever-changing landscape in payments. We will become the trusted source for the facts around new technology and what merchants will need to consider before deploying it. Working with current providers in the industry and engaging payment professionals, we are kicking off the work effort to understand these needs and how to best deliver this information to the decision makers within the merchants’ payment teams. 

Simultaneously, the MAG will also start engaging with the fintech ecosystem to educate them on what type of solutions merchants are looking to deploy. The goal of this engagement is to create innovation centered on increasing the transparency and competitiveness in the payment space. It seems too many innovators are just using the current payment ecosystem and layering on expenses instead of trying to solve real customer issues and creating competition in the payment space.

Jamie Henry will Chair a new committee focusing on these issues, which will provide the MAG with important merchant insights as we move forward on these initiatives. If innovation in payments is something that you have a passion for, please let us know, and we will include you as this committee begins its work.  

John Drechny
Merchant Advisory Group, President