3 PAYMENT METHOD SCORECARD: CARD | CREDIT
Decision-Making Forums The card industry has many forums bringing stakeholders together including the U.S. Payments Forum, Merchant Advisory Group (MAG), and Merchant Risk Council (MRC). However, the major strategic governance decisions are made by EMVCo, a global technical body with six member organizations, American Express, Discover, JCB, Visa, Mastercard, and UnionPay which are card networks. 808 While EMVCo invites participation from non-card network industry stakeholders, our understanding is that those other stakeholders do not have as much representation in the decision-making processes at the organization. Decision-Making Balance The card industry seemingly does not have a balanced governance structure between stakeholder groups. EMVCo may consult with stakeholder groups such as merchants and consumers, however, we understand decision-making is centralized. Fee Setting In most countries the card networks determine the interchange and network fees for card payments Central Bank Support While in countries like the U.S. and Australia, the Federal Reserve and the Reserve Bank of Australia oversee regulation over interchange fees, most countries do not have central bank active oversight for card payments.
Governance
Metrics
Weight Score
Presence of Regulation (Merchant) Presence of Regulation (Consumer) Central Monitoring (Public/ Private) Decision-Making Forums Decision-Making Balance
13% 1.5
13% 5.0
13% 1.0
13% 2.0 25% 1.0 13% 1.5 13% 2.5
Fee Setting
Central Bank Support
TOTAL SCORE
1.9
Regulation Presence (Merchant) While we see co-badging on credit cards in countries like France and South Korea, it is typically not mandated in most countries. Merchants often have little choice over which brands to engage. Regulation Presence (Consumer) The four major U.S. credit card networks – Visa, Mastercard, American Express, and Discover – offer $0 liability protection to consumers. 805 Consumers in the U.S. are also protected under regulations such as the Truth in Lending Act and the Equal Credit Opportunity Act both under the Dodd-Frank Act. 806 807 Central Monitoring (Public/Private) Card standards, i.e., technical specifications, such as EMV and 3DSecure, are governed by EMVCo for most card transactions. EMVCo is a consortium consisting of global networks Visa, MasterCard, American Express, Discover, JCB, and Union Pay. When not otherwise dictated by local governments, the networks themselves have network rules that determine interchange fees, card acceptance requirements, and surcharging rules among others.
170
Powered by FlippingBook