advertisement
advertisement

MasterCard: December PCI Deadline Change Not For Holiday Conflict

Written by Evan Schuman
January 4th, 2010

MasterCard’s decision to reverse itself on its end of year 2010 deadline for new Level 2 PCI requirements was not based on retail complaints or on avoiding the hectic holiday period for merchants, according to a key MasterCard manager heading up the effort. Instead, the change was based on giving retailers more time to work with a new PCI training program, he said.

John Verdeschi, the senior business leader for fraud management at MasterCard Worldwide, said he had heard “no complaints” about the timing from retailers. “We didn’t hear that as a specific issue,” he said, adding that the PCI SCC’s new training program was the only reason for the deadline change.

Another element of the December 13 change is a little less cut-and-dry. Until about three to four months ago—Verdeschi described it as “August or September”—MasterCard had posted on its site a description of the rules for which PCI level (1, 2, 3 or 4) it would consider retailers. MasterCard described parity with any “competing payment brand,” wording that it had used since 2005.

But in “August or September,” Verdeschi said, that wording was removed. “We needed to change this language because Amex, Discover and JCB programs are sufficiently different from MasterCard’s and Visa’s, and the ‘competing brand’ term was causing confusion. So to simplify, it now says ‘Visa,’ which again facilitates alignment of the MasterCard and Visa programs. And this is exactly what customers have said they wanted.”

Added Verdeschi: “We started to get a lot of questions around that language, so we pulled that language” with the intention of replacing it.

The problem is the message retailers may have internalized during those three or four months, between when the initial phrasing was removed and the new phrasing posted. When MasterCard removed the “competing brand” wording and neither replaced it with anything nor added any explanation, some retailers interpreted it—reasonably enough—to mean that MasterCard had changed its policy. Not so, Verdeschi said. The policy hadn’t changed; just the Web site phrasing did.

Verdeschi said he doubts there were a lot of misunderstandings because of the Web site and stressed that he had not heard any complaints about it. “Acquirers and merchants, I don’t think they were confused by it,” he said.

What MasterCard did with its actual policy change—the one posted on December 13—is a good move forward, bowing to the reality that Visa and MasterCard combined control such a huge percentage of the payment space in the U.S. that it truly makes sense for them to mirror each other as much as possible. And the other large card brands are indeed quite different.

But MasterCard’s dismissal of the confusion caused by a 3- or 4-month disappearance of a few key lines of policy language is much less comforting. MasterCard must have understood that, in late 2009, retailers would assume that what is posted on its official Web site is in fact MasterCard’s policy. What took 3 or 4 months? If there was some heated debate going on internally, why not leave the old wording up until the new wording was ready? It’s ironic that MasterCard is saying it removed the wording to halt confusion, when it’s reasonable to suggest the move likely caused much more confusion than it cured.


advertisement

2 Comments | Read MasterCard: December PCI Deadline Change Not For Holiday Conflict

  1. Hybrid Forge eCommerce Says:

    This announcement did take some pressure off but PCI must be taken seriously by e-tailers.

  2. National Retail Federation Says:

    NRF’s CIO Council and IT Audit Committee, along with many retailers, sent numerous communications to MasterCard about our concerns regarding the proposed changes and timeline. It is both unfortunate and troubling that those concerns were never communicated effectively within their organization.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

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...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.