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(Sep2007)ETA Positioned on Industry Issues |
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On behalf of its membership, ETA has issued policy positions addressing key industry issues, and is working for their acceptance by card companies and industry regulators. These positions focus on the Interchange System, Surcharge Fees, Industry Self-Regulation of Data Security Standards, Consistent Application of Card Industry Rules and Regulations and Direct Sponsorship for Qualified Payments Companies, all of which currently have a great impact on the industry.
Interchange System
The current system of interchange has fueled the growth of safe and secure electronic payments. Constant scrutiny from merchants, lawmakers, regulators, and others has threatened this system as never before. ETA has positioned itself to help ensure an interchange system that is secure, equitable, growth-oriented, and that instills consumer confidence and convenience.
ETA advocates private sector governance of interchange and opposes any government regulation or price controls on rates and terms. ETA believes the card companies should promote a rate setting process that is recognized by participants as transparent, fair, appropriately communicated and driven by market forces. ETA also advocates that card brands continue to provide meaningful interchange-based incentives for penetration into new markets, new payment technologies, and methodologies to ensure continued industry growth.
ETA believes that registered Independent Sales Organizations (ISOs) and third party service providers should directly receive interchange rates, operating regulations, change announcements and other bulletins directly from the payment card companies. Moreover, these announcements should be provided in a timely manner to ensure that the entire payments community has adequate time to respond to interchange rate and other technical changes. ETA also advocates that the card brands establish a formal process, such as a defined comment period, to obtain stakeholder input on the timing and compliance requirements associated with the interchange system.
Surcharge Fees
ETA believes that businesses should have the right to establish fair and reasonable surcharge fees that are properly disclosed to consumers in order to compensate for expenses associated with accepting payment cards pursuant to general guidelines developed by the card brands.
Industry Self-Regulation of Data Security Standards
In light of the expanding number of incidents involving compromised card holder information, ETA strongly supports strengthened industry self-regulation of the protection of cardholder data through the Payment Card Industry Data Security Standard (PCIDSS). ETA advocates that PCIDSS should become the industry standard for data security and should reflect input from all members in the payments system. ETA believes that PCIDSS should evolve to be more flexible and scalable to accommodate the unique needs of small businesses. ETA also advocates that the card brands increase awareness of data security violations and publicize best practices wherever possible.
Consistent Application of Card Industry Rules and Regulations
ETA advocates enhanced compliance by improving access to operating requirements and criteria for enforcement/penalties. All entities subject to enforcement by the card brands should have due process and appeal rights and be entitled to reconsideration by the card brands in order to present mitigating information relating to an alleged compliance violation. ETA also believes that the card brands should disclose information about enforcement actions in a manner that does not identify, or compromise the businesses involved or active law enforcement investigations.
Direct Sponsorship for Qualified Payments Companies
ETA advocates that MasterCard and Visa evaluate the market potential and cost/benefits of establishing direct relationships with non-financial institutions. These institutions would be required to meet specific standards and be permitted to sponsor third parties.
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