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MCX Embracing QR Codes, The Cloud And Unparalleled Vagueness

January 17th, 2013

Lowe’s Manna offered as an example a $3 purchase and a $300 purchase. “Why does the $300 purchase cost so much more?” he asked. When payment brands argue that it’s because the risk is so much higher, Manna says he responds, “then let’s reduce the risk” instead of overcharging everyone.

Some retailers have embraced various mobile trials and said they’ll accept them all, just as they accept checks, cash, a half-dozen payment cards, giftcards, gift certificates, Traveler’s Checks and various other forms of payment today.

Walmart’s Henry said that take-all-comers strategy is a bad one. He painted a picture of what Walmart stores on Black Friday would look like with such an approach. “One customer’s face pops up on the screen. The next one keys in their phone number. The next one tries to tap their phone,” he said, suggesting it would cause associate and customer confusion, on top of sharply slowing down checkouts.

The biggest point of the group from its inception has been an attempt to not only sharply lower interchange fees but have them be charged in a manner that is much more fair to retailers. But when an audience member asked the group if MCX was open to becoming a processor, Roberts said the group would not do that.

This raises a key question. If the idea of processing payments directly is being taken off the table, what true negotiating power does MCX have with Visa and the other card brands?

Clearly, the new group—if these major chains stick together—would have huge volume purchasing power. But Walmart today already has pretty massive volume clout and it hasn’t been able to extract the types of payment interchange concessions it wants.

As long as Visa knows these chains would never want to halt accepting Visa, MasterCard, American Express and other brands, they have to play by the brands’ rules. Only if the brands honestly believe the business—and, with it, the brands’ executives’ livelihoods—might go away will they negotiate in good faith. Why that option is being taken off the table so publicly and so early is baffling.


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Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
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