By Biff Matthews
As the payments industry strengthens cardholder data security through compliance with the National Retail Federation and The National Association of Convenience Stores have worked to lower, if not eliminate, interchange fees.
Interchange fees for convenience store (C-store) operators are often higher than labor cost. Ninety percent of C-store business is in the petroleum environment, and the number of employees is low, so these fees are the greatest expense.
The interchange skim, as C-store operators regard it, is a major revenue source for the card issuing players. The ACH environment is a parallel threat to the interchange revenue stream, and one that is guaranteed to gain ground.
Anyone selling decoupled cards needs to apply the PCI DSS requirements to the ACH environment - before it is mandated. There is no defense equal to preemption. If you are PCI compliant for credit card transactions, it's a short step to secure ACH transactions equally. You've invested 90% of the dollars needed to accomplish this, so invest the additional 10%.
Not only is this an easy step, but it's also a sales tool. Being able to say you are not only PCI compliant, but also equally secure for ACH transactions speaks powerfully about your priorities and business practices. PayPal, Google Checkout and other online marketers will eventually embrace ACH. For now, early adaptors will have the advantage.
If you are an ISO discussing PCI compliance with merchants, and you're selling ACH processing, you should be talking about security for credit card and ACH transactions. And if you are an auditor, offer to look at a client's ACH processing while you're on site auditing credit card transactions.
ACH legislation is in the pipeline, so let's all just get over it. The choice is to spend $10,000 for PCI compliance for credit cards and another $1,000 for ACH, or wait and start all over later, at which time the bill will be higher.
Think water pumps: The auto mechanic says, "While we're replacing it, we'll have access to the timing belt and gear, so you may as well change those as well - they all have similar service lives." If you decide otherwise, you'll save a few bucks today, but a year later, when the timing belt does go out, not only will you be without your car, again, but the price will be double.
The analogy is accurate on all counts: cost, inconvenience and the hazard of waiting.
Biff Matthews is President of Thirteen Inc., the parent company of CardWare International, based in Heath, Ohio. He is one of 12 founding members of the Electronic Transactions Association, serving on its board, advisory board and committees. Call him at 740-522-2150 or e-mail him at firstname.lastname@example.org.
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