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Operations Quarterly Update: Paralyze Resistance with Persistence (and Collaboration)(MAG Quarterly- Volume Seven, Issue Three)

September 5, 2019

In 2016, the then Operations Committee defined a set of network best practices that, if implemented, would give merchants a more level playing field within the payments ecosystem. These best practices were prioritized and categorized:

  • Fundamentals include concepts that should be practiced by stakeholders in establishing rules, standards, and basic requirements for payment practices that support customer authentication, fraud mitigation, and equitable incentives among stakeholders.
  • Debit addresses practices and protocols that ensure merchant debit routing rights remain intact and robust.
  • Digital covers practices in the mobile, online, contactless, and other digital channels or products that enable merchant choice of acceptance and transparency around rules and 3rd party wallet practices such as data use, security, cost, and customer experience.  These best practices also call for changes in pricing, process, rule (chargeback), fraud, and specification practices related to the digital payment environment.
  • Chargebacks & Fraud addresses practices that reduce chargeback abuse, provide transparency into fraud/chargebacks in the system, and improved chargeback tools and procedures.

Since that time, the best practices were placed on a roadmap continuum to show those best practices that could/should be made near-term vs. those that will likely require a more long-term effort. Additionally, we created “scorecards” for each network to show the progress being made through our on-going collaboration.

We’ve had several successes:

  • Eliminate signature capture & retain for chargeback re-presentment purposes.
  • Eliminate signature as a CVM. 
  • Implement network quarterly updates.

And we’re seeing progress on several other best practices:

  • Process reversals and release open-to-buy holds in real-time.
  • Develop a better and consistent process for EMV certification.

Each year, we formally review the network scorecards during meetings with the networks and the MAG Board of Directors. These reviews give the networks an opportunity to provide updates on their progress and to share their rationale for not progressing on any priority best practices. If a network philosophically disagrees with a best practice, we then work with the Advocacy & Communications Committee to ensure legislators and regulators understand the merchants’ point-of-view.

Roadmap Refresh:

We recently surveyed the members of the Collaboration Committee to determine if any of the priorities had changed and to see if there were any new best practices that should be added. The Committee defined one new best practice, clarified another, and reprioritized several others:

  • New: Provide PAR to merchants for all transactions (tokenized or clear text)
  • Clarified: Confirm debit routing is supported for all new technologies including, but not limited to, tokenized and contactless transactions.
  • Increased in priority:
    • Implement a standard lead time for acquirer-to-merchant spec changes.
    • Engage merchants re new network-issued rules & technologies in the concept phase.
    • Ensure all stakeholders have equal participation on all new or changed U.S. payments standards.

These changes have been incorporated into the roadmap, and we will continue to leverage the Network Best Practices to ensure that the merchants’ voice is heard by all payments stakeholders.

Please contact Laura Townsend if you have any questions.