Within the dynamic payments sphere, much has changed in the past decade, but certain themes have remained constant. For example, the need for common, comprehensive data security, the future of mobile payments and merchant dissatisfaction with certain card company practices.
The lead article in our Feb. 14, 2005, issue detailed a collaborative effort between Visa Inc. and MasterCard Worldwide to bolster data security. The companies built on Visa's Cardholder Information Security Program (CISP) and MasterCard's Site Data Protection (SDP) and introduced a new set of guidelines dubbed the Payment Card Industry Data Security Standard in December 2004. PCI is a reorganization of the fundamental foundations of CISP and SDP, stated Visa's John Shaughnessy. "The PCI Security Standard was created to provide a common and more efficient framework for both," he said.
The article "Paying the piper on a mobile device" expressed skepticism about the use of mobile phones for payment acceptance. "Think about the cost of infrastructure and support that's in place for traditional payment terminals, and then consider the fact that nothing comparable exists to support mobile phone- or PDA-based payment devices," wrote Verifone's David Talach. "How do you update the device? How do you keep the merchant from downloading other applications onto the device that might have an impact on the payment application?"
Defendants Citigroup Inc. and MBNA Corp. were added to a 2003 complaint filed against American Express Co. on behalf of merchants across the country. Both institutions had recently signed contracts with AmEx. The complaint alleged the tying agreements AmEx imposed on merchants to accept all of its products were illegal, as were its arbitration clauses. According to Gary B. Friedman, lead attorney for the plaintiffs, the higher interchange fees merchants had to pay to accept AmEx-branded revolving credit cards were harmful to their businesses.
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