COMMENTARY: Don’t Shut Merchants out of Development of Secure Remote Commerce

The global payment networks announced last week their support for the EMVCo Secure Remote Commerce Framework (SRC) and mentioned proprietary programs being introduced predicated on this framework with the promise to deliver security, standardization, simplification, fraud reduction, and increased conversion for digital commerce.

The promise sounds like a keeper. Yet it is difficult to embrace the promise based on a high-level framework with limited details about implementation plans and about the impact to the customer experience.

Early engagement by all stakeholders, including merchants, in the design and development of any payment solution is requisite for broad industry support and timely and efficient adoption. Design and development by select stakeholders in isolation is counter-productive in the long run. Unfortunately, payment standards created and published by EMVCo involve a design-and-development process limited to select participants that have decision-making powers—the global payment networks.

SRC is another example of a payment product designed in a silo with limited information flow and arbitrary, tight timelines. Cross-stakeholder engagement that includes merchants in the development of standards within an open, accredited standards body would best position the industry to achieve best-in-class standards, transparency, and adequate industry readiness to deploy solutions.

Merchants fully support the introduction of payment products and standards that enhance the customer experience, enhance security, and reduce fraud while also supporting flexibility and choice for both consumers and merchants. Choice is imperative to foster competition in the market. Competition drives innovation and cost efficiency for the industry and benefits all stakeholders, including consumers.

At this point, it remains unclear which stakeholders may perform the roles and functions described in the SRC program. In addition, it remains unconfirmed whether SRC is a framework that supports participation without limitation, including participation by domestic debit networks.

Without question, U.S. merchants expect their legal rights to be met concerning choice in routing among competitive debit networks with any payment product, standard, or method, regardless of implementation approach, technology, licensing, or other commercial or business arrangements.

Based on the announcements, EMV payment tokens and EMV 3-D Secure will be integral components and, potentially, requirements by network implementations. To date, EMV payment tokens have been implemented in a manner that denies merchants debit-routing choice within e-commerce or mobile-device application channels. The Merchant Advisory Group (MAG) issues a public call to action for the industry to ensure any and all current and future payment products and solutions do not inhibit merchants’ debit-routing rights.

MAG and its merchant members expect that new payment products, solutions, and related operating rules will be implemented within reasonable timelines to allow for adequate development, testing, and deployment among all stakeholders. Although Mastercard remains silent on its timing for SRC implementation, Visa’s announcement indicates a transition of current Visa Checkout merchants, consumers, and issuers to SRC sometime in late 2018.

Merchants are being called on to come together and embrace SRC. Transparency and clarity on the implications for the customer experience, cost of acceptance, liability implications, and integration requirements will help merchants make that choice.  Without these details as defined by network rules and operating regulations, the request to join hands is unfair.  While the SRC framework has been finalized, merchants ask that the networks begin to engage merchants now in their implementation plans.

Merchants want to deliver the best customer experience across all commerce channels securely and seamlessly.  They want to be a partner in product design. They strive to offer the best-in-class choices among innovative and competitive payment solutions. Let’s partner together as an industry to improve overall commerce.

—Laura Townsend is senior vice president for operations at the Merchant Advisory Group.