Digital Transactions Authoritative, insightful and timely information for payments professionals
A lull in the longstanding war of words between merchants and the global payment card networks came to an end with the creation Thursday of the Secure Payments Partnership, an advocacy group of retailers and PIN-debit networks. On Friday, the Electronic Payments Coalition, a Washington, D.C.-based lobbying organization led primarily by card networks and large financial institutions, issued a brief statement blasting the SPP.
“Here retailers go again, lobbying Washington for further regulation in the interest of cutting their own costs instead of protecting their customers from fraud,” Jeff Tassey, chairman of the EPC’s board of directors, said in the statement. “Despite claims, all players in the payments ecosystem—including retailers—have the opportunity to provide feedback and participate in the process. We must all be committed to providing consumers with security and innovation without impeding consumer choice.”
The SPP says it wants merchants, debit networks, and community banks and credit unions to have more input into payment-related security standards such as those promulgated by EMVCo and the PCI Security Standards Council. Both organizations were founded by global card networks, though they have procedures for taking comments from merchants and others as they update their rules. PIN-debit networks also are concerned about protecting their transaction-routing rights under the Durbin Amendment to the 2010 Dodd-Frank Act as new payment technologies emerge and security standards evolve.
The EPC in recent years has squared off against some of the nation’s biggest merchant groups, including the National Retail Federation and the National Association of Convenience Stores, as it defended Visa Inc., Mastercard Inc., and card issuers in disputes over interchange, payment card acceptance rules, and debit card transaction routing. But, with EMV chip cards now widely issued and gaining acceptance in stores, things had been fairly quiet on the payment card battleground in recent months.
The simmering conflict heated up with the SPP’s birth, however. In a statement Thursday, the Washington-based NRF said “the United States currently lags behind the rest of the world in card payment security, largely because Visa and Mastercard control security standards without sufficient input from competing card networks, merchants, consumers, and financial institutions.”
NRF senior vice president and general counsel Stephanie Martz said in the statement that “the payments system has to keep pace with rapidly evolving technology and the needs of consumers and commerce. The U.S. payments infrastructure should be the strongest, most innovative and most secure in the world, but we won’t get there unless we change the way we make security decisions.”
Neither Visa nor Mastercard responded to Digital Transactions News’s requests for comment about the SPP.
Besides the NRF and NACS, the SPP’s founding members include the National Grocers Association, the Food Marketing Institute, processor First Data Corp.’s Star debit network, and Shazam, a Johnston, Iowa-based debit network, merchant acquirer, and card processor with 1,100 bank and credit-union clients.
