The bankcard industry is issuer-driven. At times it seems acquirers don't have much of a voice, particularly with the card Associations. However, the Merchant Acquirers Committee (MAC) has made great strides in changing that.
MAC comprises professionals in risk management for card processing's acquiring side. The organization's mission is to provide risk management solutions through ongoing communication and cooperation among members.
By bringing people together in a noncompetitive environment, the group helps fight fraud and mitigate risk by addressing the needs of acquirers, processors, ISOs and others that accept transaction risks.
Many times acquirers learn about payment card scams by chance. MAC members share ideas and experiences and help the industry as a whole reduce losses. Deana Rich, MAC's President, summed up the group's mission as keeping "the bad guys from jumping from ISO to ISO or acquirer to acquirer."
The card Associations belong to MAC and have actively supported the organization since its inception in May 1997. Representatives from American Express Co., Discover Financial Services LLC, MasterCard Worldwide and Visa U.S.A have participated as board advisors since that time.
MAC's 2007 officers include Deana Rich, Rich Consulting, President; Laurie LeBoeuf, Take Charge Business Consulting LLC, Vice President; Jeffry A. Beene, Pipeline Data Processing Inc., Treasurer; and Toni Pennell, Discover, Secretary.
Board members include representatives from EVO Merchant Services, Group ISO Inc., Innovative Merchant Solutions, National Processing Co., NOVA Information Systems, Pay By Touch and Terminal Velocity Processing Inc. There are also advisers from MasterCard, Discover and Visa.
MAC board members have an average tenure in the industry of 21 years; Larry Herrmann of NPC has logged more than 36 years in the payments space.
MAC 's first meeting 10 years ago was attended by 23 people. It was such a success that the following year the group created a national steering committee and regional chairpersons. Today more than 200 organizations belong to MAC. Schedule permitting, the next annual meeting will be October 11 to 12 in Las Vegas.
MAC is a grassroots organization that has evolved and grown along with the industry it serves. Due to increased industry needs and burgeoning membership, MAC filed for nonprofit status this year.
Co-founding member Beene said, "We feel that this move will allow for a more formalized training agenda for risk personnel, as well as more data collection and sharing of information to help stop the bad guys."
MAC has always been independent, but its members are happy to provide guidance and education to their peers. They have offered educational presentations at many Electronic Transactions Association (ETA) and International Association of Financial Crime Investigators (IAFCI) conferences.
MAC members also serve on industry-wide committees that assist efforts to reduce counterfeiting and fraud. "We are available to any of those committees if they have a session on risk," Rich said.
Members also help with educational programs for the Federal Trade Commission, law enforcement agencies and the legal community.
Most recently MAC has worked with the Department of Homeland Security and the Secret Service. "We are a great 'go to' for risk because we have so many people who are very experienced in the industry," Rich added.
According to MAC, ISOs should be concerned about data security. The group's presentations include information about how ISOs can protect themselves and avoid fraud. For example, Rich noted the importance of education and site surveys. "From a risk perspective, we could solve a lot of problems with better site surveys," she said.
MAC membership saves people time, money and aggravation. Through their communication efforts, including e-mail alerts, MAC members can identify industry fraud trends as they occur. Hence, members are informed of the latest scams and protect themselves accordingly.
MAC alerts members about instances of known fraud and identity theft, helping them prevent potential losses. "If it is an investigative fact, we will tell others," Rich said.
In instances of potential fraud, MAC will request information from any member who may have experience with the situation or the merchant in question. "We don't put speculation out there," Rich said.
The group does not keep a list of e-mail addresses or merchant names. But it does provide a network and a sense of camaraderie. Risk managers who are experiencing fraud can ask for advice from members who have experienced similar situations.
MAC's Web site at www.macmember.org is being revamped. When it is fully functional, members will have access to information and membership lists there.
Many risk and underwriting professionals simply don't have the time or budget to frequently travel to meetings around the nation.
The nature of their work dictates that they stay near their businesses and keep their fingers on the pulse of potential risks and fraud.
Therefore, MAC is divided into three geographic regions to make attendance at events convenient. Richard Parrott of Pay By Touch runs the Eastern Region. Larry Herrmann of NPC heads up the Midwest Region and Geoff Gray of Terminal Velocity is in charge of the Western Region.
Rich noted regions host meetings at least twice a year. MAC usually works with the IAFCI to coordinate the locations and times of its annual meetings, so that attendees can get the most from their travel budgets.
MAC membership has privileges and responsibilities. The group's strength lies in knowledge and cooperation. As such, members are asked to share information about new risks as they encounter them.
Members are also asked to participate and respond to queries involving merchants with whom they are familiar. Additionally they share articles of interest with the group.
MAC's goals for this year include completing its status as a nonprofit corporation, updating its Web site to provide more resources to members and creating a member contact database.
The organization also intends to remain a premier resource for risk analysts and underwriters in their daily efforts to stop fraud.
"We want to continue having a voice with the Associations that grows over time," Rich said. "We do represent the majority of acquirers from the risk side so, generally, when we present an issue, we aren't simply complaining. We include changes that benefit the industry as a whole and protect brand names."
You've probably benefited from MAC's efforts. The group is responsible for implementation of the "ACQ" designation on credit reports. In the credit reporting industry, entities authorized to pull credit reports are called subscribers.
If you obtain a credit report, and a subscriber that is also an acquirer has previously pulled the report, the subscriber's name will appear on the document, followed by ACQ.
This is helpful when analyzing a merchant's risk factors because you can contact the other acquirer and share information before you make a decision about the merchant in question.
MAC also worked with MasterCard to allow AmEx to post information about terminated merchant accounts to the Member Alert to Control High-Risk (MATCH) database, which was established by MasterCard.
MATCH is used by acquiring banks to identify terminated merchants. This is one way MAC has been instrumental in combining resources for the benefit of acquirers.
James Steel, Regional Vice President, Security and Risk Management for MasterCard, noted that "the greatest accomplishment [of MAC] involves the large number of independent acquirers and others involved in merchant acquiring _ all agreeing to work together through MAC to share information and resources in combined efforts to reduce fraud."
Buddy Tinnell, Director, Risk Consulting and Strategic Integration for Visa, agreed that the group's greatest accomplishments include "facilitating communications and open dialog between natural competitors."
Rich added that MAC's diversity and longevity have enabled the group to "unite people who wouldn't otherwise have a voice."
No doubt MAC's board members are motivated by what they've been able to accomplish as a group: a community working together for the benefit of all.
Bob Aguirre, Risk Manager of Group ISO, said, "We have united the members of the acquiring industry into a single-minded group outside of the competitive arena, with the mission of managing risk, reducing losses and combating fraud."
MAC membership is open to just about anyone involved in risk management. This includes merchant acquirers, ISOs, merchant service providers (MSPs), processors, card Associations, acquiring banks and credit unions, payment gateway providers, Internet service providers, and law enforcement agencies.
"To increase our ability to control risk and share information we have expanded our membership categories to include regular members, partners and vendors," Rich said. "This is a great stride for MAC."
Historically, the group has not charged membership fees, but that has changed. Rich said membership fees and sponsorship opportunities are necessary "to be able to bring the group to the next level of information sharing and provide events and meetings."
Regular membership is open to risk analysts and underwriters who underwrite and review transactions for banks, savings and loans, credit unions, third-party processors, ISPs, ISOs, or law enforcement agencies. These professionals are on the front lines and see the scams first. Their managers are also eligible for regular membership.
To qualify for regular membership a company must also assume risk for transactions. The annual fee for a single regular member is $65, with an annual renewal fee of $40. The fee for a corporation with up to four members is $150, with an annual renewal fee of $125. There are no fees for law enforcement agency memberships.
Regular members receive all educational and informational communications MAC provides, including e-mail alerts about fraud schemes. Regular members also have the ability to send inquiries and alerts to other MAC members.
ISOs and MSPs that do not take financial risk and are not involved in underwriting do not qualify for regular membership. However, they can still benefit from MAC's offerings. As partners, they are invited to query MAC about risk or fraud prevention issues and will receive relevant articles and other information.
Partner memberships are open to any ancillary service providers including companies that provide loans and those that offer risk monitoring for ISOs but do not assume risk.
Partner members do not receive inquiries and alerts, but they do receive informational and educational data. Partners may also send inquiries to MAC members. The cost for a partner is $200 per year.
Vendor membership is open to companies that provide risk or underwriting services to MAC members, such as providers of fraud fighting and compliance software. Although they do not receive inquiries or alerts, they have access to relevant articles and information. They are also able to send inquiries.
The cost for this membership is $300 per year.
Rich said MAC's board members derive satisfaction from doing the right thing. They are also motivated by giving people a voice.
"You can't just call up the Associations and talk about risk," Rich said. "But, if we are MAC and we are all talking and presenting a cohesive argument, we can. I really believe in MAC. It's fun to know you can make a difference and be more than just a cog in a wheel."
And this influential voice was se-cured in a mere 10 years by a group of very dedicated volunteers.
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