3 PAYMENT METHOD SCORECARD: DIGITAL WALLET (PASS-THROUGH)
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. 817 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, we understand however, decision-making is centralized. Fee Setting Given pass-through digital wallets are backed by cards, fee setting depends on the card type. 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 support 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% 3.0
13% 5.0
13% 2.0
13% 3.0 25% 1.0 13% 2.5 13% 2.5
Fee Setting
Central Bank Support
TOTAL SCORE
2.5
Regulation Presence (Merchant) Given pass-through digital wallets are backed by cards, regulation depends on the card type. For debit backed digital wallets, routing can be more difficult because of the default use of network tokens. Regulation Presence (Consumer) Given pass-through digital wallets are backed by cards, regulation depends on the card type. 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.
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