Tuesday, July 17, 2012

Special Interest Groups for 2013

Do you have questions about PCI?  Is there a technology you want to know more about?  Is there some part of PCI that drives you or your colleagues nuts (er, that's a technical term...)?  If so, then the topic might be a good one for a Special Interest Group (SIG).

The Council is looking for suggestions for the 2013 SIGs.  As a Participating Organization, NACUBO has the opportunity to nominate topics.  But to do that, NACUBO needs to hear from you.  Please reply to this post or send an email to me (wconway@403labs.com) or Tom Davis (tdavis@iu.edu) with your suggestion.  The deadline if July 31.

Monday, July 16, 2012

The Credit Card Settlement and You

By now, you should be aware of the proposed settlement involving both Visa and MaterCard (see here, and here for the NYTimes update ).

Based on the summary at Payments News, there are some things to note and be aware of.  First, here are the three elements of the settlement:

  • Reduced credit card interchange for a period of eight months.  This should result in a drop in merchant fees for the "affected class."
  • A change in card brand rules to allow merchants to surcharge under certain conditions.
  • An agreement whereby the brands will meet with groups of merchants to negotiate interchange rates collectively.

Each of these has potentially significant impact for Higher Ed institutions and their card programs.

The reduced fees should show up in lower merchant fees.  That is, the plan is for acquirers to pass along those savings to merchants.  If the settlement goes through, and if the interchange rate reduction includes all merchants (which is unclear), you want to check that you receive the savings.  The savings may not be large, but every little bit counts.

The surcharging rules may open the doors to re-consideration of card acceptance at many institutions.  It is no panacea, and adding a percentage (assuming that will be allowed) is not very customer-friendy.  Nevertheless, surcharges may allow more schools to take cards (or at least to also accept Visa) than in the past.

Lastly, there may be room to negotiate a "Higher Ed" interchange rate with the card brands.  This is a long shot, but I know from personal experience that a lot of schools and their associations have expressed interest in talking to the card brands about a lower interchange fee for Higher Ed based on the lower risk of the transactions.  We'll have to see what happens here, but this may be the greatest impact on Higher Ed.

Stay tuned.  If this settlement goes through, it could be a significant change for Higher Ed and payment cards.

Thursday, July 12, 2012

Still Think You're Not Vulnerable?

The bad guys increasingly target small businesses.

We know that as a fact from published statistics, and now from a recent incident reported Aviva Litan in her Gartner blog.  In this case, a small restaurant in an equally small town had their POS system hacked.  The bad guys got away with a load of card data, with the result that a disproportionate share of local residents (including any number of the local police force, many of whom at at the restaurant) have their cards compromised.

The stolen cards have been used all over the world, so it's unlikely the bad guys will be caught.  The cardholders will be inconvenienced, but likely made whole by their card issuers.  The issuers will face the losses, but it is the hapless restaurant that will likely suffer the most at the hands of the card brands and their acquirer.

If a data breach can happen at a small merchant in a rural town, I hope everyone reading this realizes the same can happen to a university merchant just as easily.  The bad guys are scanning your systems every day, but one big difference between them and your ASV is that your ASV gives you a report of your vulnerabilities.

Combine the vulnerabilities of small merchants with the visibility and vulnerabilities of higher ed institutions, and we can see that PCI compliance truly is not an option.  

Change in Credit Card Surcharging Coming?

In case you missed it, there is an article in the June 9th edition of the Wall Street Journal (you may need to be a subscriber to see it all) that can affect your entire payment card program.  The Journal reports that both Visa and MasterCard may soon allow merchants to add surcharges to payment card transactions.  Currently, both organizations ban such surcharges.  As the they report:
But Visa and MasterCard, which operate the world's largest card-payments networks, ban the practice in the U.S. as part of rules they require retailers to follow to accept their cards. That ban is expected to be eliminated or altered, though, under a potential settlement of long-standing lawsuits retailers have brought against the card networks and numerous banks that issue their cards.
Two points you should note, however:
In the U.S., 10 states, including New York and California, have laws prohibiting surcharges, according to Visa. It is unclear whether merchants in those states would be able to engage in the practice if Visa and MasterCard allow it.
A change in Visa's and MasterCard's rules also wouldn't affect purchases made with cards from American Express Co and Discover Financial Services ... aren't part of the litigation.
Naturally, nobody involved is commenting, but if the ability to surcharge plastic payments is part of the settlement, it could take place as early as this fall.  Another part of the reported settlement would be reduced interchange fees, which translates into lower costs for merchants.

Speaking of this fall and lower costs...

Could this settlement -- if it happens -- lead to increased card acceptance for tuition and fee payments?