MasterCard, Visa Team Up to Fight Payment Fraud
Payment processing giants MasterCard and Visa said they are forming a new cross-industry group focused on enhancing payment system security. The group will include credit unions of all sizes, the companies said.
Security is on everyone’s mind these days, following a spate of well-publicized data breaches involving card-contained personal data on millions of U.S. retail customers last year.
Recently The National Retail Federation called on financial services firms – and payments firms like MasterCard and Visa – to ramp up their adoption of secure card technologies, and other security practices. Banks, credit unions and payment processors have countered that NRF’s member retailers also have a role to play in securing customer data from thieves.
So, along come MasterCard and Visa, playing the mommy role and trying to bring everyone together. The two companies say their new group will comprise banks of all sizes, credit unions, acquirers, retailers, point-of-sale device manufacturers and industry trade groups. Most everyone in the payments food chain, in other words.
To understand how high the stakes are for these two companies, just look in your wallet. Chances are, you have at least one debit or credit card with a “MasterCard” or “Visa” logo on it. These two companies handle billions of dollars of payments involving merchants, financial institutions and customers in more than 150 countries.
Visa and MasterCard make their money from interchange or “swipe” fees charged to merchants whenever they process a transaction. They occupy a place in the system where they interact with financial institutions and merchants – so perhaps it’s fitting that Visa and MasterCard would presume to play referee in arriving in the process of finding a comprehensive solution for improving payments security.
The companies say that their goals include advancing the migration to EMV (security chip-in-card technology) in the United States, promoting other security solutions like tokenization and point to point encryption and developing an “actionable roadmap” for securing the future across all segments of the payments industry.
This is all good stuff, potentially. But we can’t help but see this as the “money men” of the payments industry getting together to decide our future. Shouldn’t there be consumer advocates in the mix? Or perhaps elected representatives of the people? (OK, go ahead and laugh at that last one). But you see the point: the security of everyone’s personal data is at stake in these discussions.
Safeguarding this data will include not only new technologies but guidelines and policies for how this data is to be collected and used. This is truly where the “devil is in the details” in the discussion. Shouldn’t there be people involved in the discussion — (other than credit unions) — who don’t have an obvious profit motive?
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