welcome to charlotte! - merchant advisory group · online transactions that do not involve...
TRANSCRIPT
General Session Welcome to Charlotte!
Meeting Space Internet Code: MERCHANT
5 Years
Lee Jurgens
Chairman Ralph Lauren
John Drechny Vice Chair Wal-Mart
Chris Priebe Treasurer
Southwest Airlines
Alok Mathur Secretary
Hughes Network Systems
MA
G O
ffic
ers
Mem
ber D
irecto
rs
Dee O’Malley Best Buy
Brian Rady Redbox
Dean Sheaffer Boscov’s
Doug Linkowski Marriott Corporation
Laura Ermer McDonald’s
Maureen Elworthy Ahold
Tim Patterson Alon Brands
Your MAG Staff
Mark Horwedel CEO
Amy Sellheim Executive Director
Kari Hartley Manager, Member Services
Guest Merchants
Harris Teeter*
Saks*
Welcome New Members
AMC Entertainment Inc.
Amway*
Apple*
Hertz*
Hyatt*
Limited Brands*
Safeway*
Staples*
Toys R Us
Universal Orlando*
* represents in attendance
MAG’s Membership Growth
23 29
38
43
68 72
20
30
40
50
60
70
80
2008 2009 2010 2011 2012 2013
Members
Silver Sponsors
ACI Worldwide
Acquirer Systems
B2 Payment Solutions
SignatureLink
Conference Sponsor
BIM
Welcome New Sponsors
Thank You Returning Annual Sponsors
Silver Sponsors Acculynk
FIS /NYCE
Fiserv/Accel-Exchange
Gemalto
Jeanie
MagTek Inc.
Multi Service
PULSE
SHAZAM
Transaction Network Services
STAR Network
Gold Sponsors
CardinalCommerce
UL
Premier
WorldPay
Thank You Returning Elite Sponsors
Elite Brands American Express
Discover
MasterCard
Visa
Elite Acquirers BAMS
Chase Paymentech
Elavon
First Data
Heartland Payment Systems
TD Merchant Services
Vantiv
• Conference Ratings
• What’s Working
– Breakout Sessions
– Members able to bring 2 attendees complimentary
– Your participation in panels and networking
Your Feedback Matters!
Conference Excellent Very Good
2012 Mid-Year 40% 50%
2012 Annual 38% 54%
• Implementing this week…
– Merchant special interest group round tables
– Open discussion session
– Networking room provided during breakouts
– Longer networking breaks and lunches
– Dedicated social hour and dinner for sponsors
Your Feedback Matters!
The MAG’s Mission
The Merchant Advisory Group (MAG) is a unique merchant member-based trade
association focused on the payments industry. The purpose of MAG is to drive positive change by establishing a collaborative
relationship among all parties involved in the payments industry.
Education
Webinars
2013 Goals
Website
Newsletter
Advocacy
2013 Goals
Update On Litigation, Legislation and Regulation Affecting Our Industry
An Overview of Recent Decisions and Events
Barrie VanBrackle Partner, Manatt, Phelps & Phillips, LLP, Washington D.C.
• Litigation Update-
1) In Re Payment Card Interchange Fee and Merchant Discount Litigation (No. 05-MD-1720) (JG)(JO)
Class Action settlement – Preliminarily approved November 27, 2012 (discussion of impact- including surcharge consent- to follow)
2) Apple Inc. v. The Superior Court of Los Angeles County, Respondent; David Krescent, Real Party in Interest S199384, The Supreme Court of California (2/4/13)
3) Canning v. NLRB (U.S. Court of Appeals, D.C. Circuit, January 2013)
3) In re Zappos.Com, Inc., Customer Data Security Breach Litigation 2012 WL 4466660 (D. Nev.)
Excerpt of Apple opinion
• The Supreme Court of California in Apple, Inc. v. The Superior Court of Los Angeles (2/4/13) further clarified the Song-Beverly Credit Card Act of 1971 (the “Act”) following the Pineda case of last year. Specifically, section 1747.08 of the Act prohibits retailers from ―[r]equest[ing], or requir[ing] as a condition to accepting the credit card as payment . . . , the cardholder to write any personal identification information upon the credit card transaction form or otherwise. In Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524, the Supreme Court of California held that a zip code is considered personal identification information which cannot be requested or recorded by a retailer in completing a credit card transaction (subject to certain exemptions in the Act).
• David Krescent, the real party in interest in the Apple case, sued because he was required by
Apple to provide certain “personal identification information” in conjunction with an electronic download of certain goods. The Apple court considered whether section 1747.08 is violated when a retailer requests personal identification information in connection the purchase of an electronic download via the Internet. The Court held that section 1747.08 does not apply to online purchases in which the product is downloaded electronically.
Apple, con. • However, the Apple court DID NOT decide whether section 1747.08 applies to
online transactions that do not involve electronically downloadable products or to any other transactions that do not involve in-person, face-to-face interaction between the customer and retailer. The Court expressed no view whether the statute governs mail order or telephone order transactions, as that issue is not presented and has not been briefed in this case. The Court noted that even if the statute does apply to MOTO transactions, it did not think such transactions, which often involve ―shipping [or] delivery . . . of the purchased merchandise, are readily likened to online purchases of electronically downloadable products with respect to possible means of preventing or detecting fraud (i.e., the retailer likely has other methods to detect fraud other than requesting personal information).
• We note that the decision was 4-3, with a vigorous dissent revolving around the supposed chipping away of consumer protections by allowing an out for a retailer requiring personal identification information in connection with a downloadable product (albeit to protect fraud). Given the dissent, this decision may not be the last seen with respect to the issues raised.
Canning v. NLRB • “It is undisputed that the Board must have a quorum of three in
order to take action. It is further undisputed that a quorum of three did not exist on the date of the order under review unless the three disputed members (or at least one of them) were validly appointed. It is further agreed that the members of the Board are “Officers of the United States” within the meaning of the Appointments Clause of the Constitution, which provides that the President “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law.” U.S. Const. art. II, § 2, cl. 16 Finally, it is undisputed that the purported appointments of the three members were not made “by and with the Advice and Consent of the Senate.”
Canning
• In other words...
• According to the Court of Appeals (which decision may yet be appealed), the power of the president to make appointments during a congressional recess:
1. Only exists during the formal recess between sessions; and
2. Is valid only to fill vacancies that have arisen during that particular recess period.
Canning, con. • “In short, we hold that “the Recess” is limited to intersession • recesses. The Board conceded at oral argument that the • appointments at issue were not made during the intersession • recess: the President made his three appointments to the Board • on January 4, 2012, after Congress began a new session on • January 3 and while that new session continued. 158 Cong. Rec. • S1 (daily ed. Jan. 3, 2012). Considering the text, history, and • structure of the Constitution, these appointments were invalid • from their inception. Because the Board lacked a quorum of • three members when it issued its decision in this case on • February 8, 2012, its decision must be vacated.” See 29 U.S.C.
153(b); New Process Steel, 130 S. Ct. at 2644–45.
Impact of Canning
• Legitimacy of the appointment of the director of the CFPB director Richard Cordray and the decisions implemented under his tenure? (his recess appointment was made on the same day as the NLRB appointments and under the same assertion of executive power)
Zappo’s
• Multidistrict litigation arising out of a security breach of servers belonging to Amazon.Com. Decision arose out of Amazon’s motion to compel arbitration. Motion was denied (9/27/12)
• WHY??
Zappo’s The court did not accept Zappo’s argument that a
“browsewrap” agreement effectively bound its end users to a terms of use agreement. A browsewrap agreement must be conspicuous enough to put users on notice that use of the site is subject to the company's terms of use. And online businesses should reconsider browsewrap vs. clickwrap agreements, or possibly risk losing the protection of their terms of use (including, as in the Zappo’s case, requiring users to submit to arbitration) if a court determines that there was not an enforceable agreement between the parties. The Court also focused on the fact that the contract may not be enforceable given that Zappos had reserved the unilateral right to change the terms at any time.
Zappo’s • Browsewrap vs. Clickwrap Agreements • A browsewrap agreement is an
agreement whereby a website owner seeks to bind website users to terms and conditions by posting the terms somewhere on the website; a 'clickwrap' agreement requires users to expressly express assent to the terms by, for example, clicking an 'I accept' button."
Zappo’s • The court also expressed doubt that the terms of use
would be enforceable from a substantive perspective because they contained a provision stating that Zappos "reserve[s] the right to change this Site and these terms and conditions at any time" without notice to the website user. According to the court, this blanket right of revision created an illusory contract, or in other words, no contract at all, because Zappos could decide at any time to alter its arbitration provision to suit its needs while the website user would remain bound. As such, the court suggests that even had a contract been formed, the unilateral right to modify the arbitration clause renders it unenforceable because the "agreement" to arbitrate is unfixed.
Regulatory Update • Visa announced plans to include debit cards and ATMs in its EMV
migration roadmap, and supply some of its proprietary EMV chip technology to debit card issuers to help enable adoption and compliance with debit regulations that require issuers to facilitate at least two unaffiliated routing options for their cards.
• Visa also says the EMV technology will be made available at no charge, as will an unbranded Application Identifier used to address an app within the card. "As part of our commitment [to EMV migration], we are offering the industry a common U.S. debit solution that will streamline implementation of secure EMV chip technology and advance the U.S. marketplace towards next generation payments," says Visa's Jim McCarthy. The company says the solution will enable retailers to route debit transactions via their preferred network, while issuers will still be able to switch debit networks without reissuing cards. All transactions can be routed using Visa's current magnetic stripe card methodology, and debit networks that lack their own EMV solutions will be able to support debit EMV chip payments with the solution. Visa also announced an April 1, 2015, deadline for U.S. third-party ATM acquirers to adopt EMV.
Regulatory (AND LEGISLATIVE) Impact of Settlement
• Surcharging (effective 1/27/13) 1) Illegal in 10 states (42% of credit card volume?) AND • Senate panel advances ban on credit card fees by retail merchants (NJ Star
Ledger, 2/4/13) The bill, S-2533, was passed on a 4-2 vote out of the state Senate Commerce committee.
• Fuel merchants are allowed to charge less for cash purchases, which is already permitted under state law. The difference in price, typically about 10 cents a gallon between credit and cash purchases, is considered a cash discount for consumers because it represents the average fee that fuel merchants pay credit card companies per gallon of gasoline.
• A state Assembly committee is slated to consider a parallel bill on Thursday. If signed into law, New Jersey would become the 11th state, behind New York, to ban credit card fees on customers.
• A similar bill has been proposed in Rhode Island.
Surcharging
• Different than “discounting” as provided by the Department of Justice settlement (7/20/11) with Visa and MasterCard?
Surcharging • Brand Surcharge Rules vs. Product Surcharge Rules • Surcharge caps • Surcharge limitations if a merchant accepts a
competing brand of credit card that is as or more expensive than Visa or MasterCard, and that limits the merchant’s ability to surcharge, how is merchant’s ability to surcharge under preliminary settlement impacted?
• Surcharge limitations if a merchant accepts a competing brand of credit card that prohibits surcharging
Other impacts of Settlement
• $10 minimum rule (through 7/20/21)
• Timing?
• QUESTIONS?
Routing Roulette
Moderator: Dee O’Malley Senior Director, Financial Services – Best Buy
Jamie Landheer President , Director of Client Relations – Vantiv
Steve Mathison VP, U.S. Acquiring Payments – First Data
Derrick Carpenter VP, Group Product Executive – BAMS
Conan Lane Chief of Operations – Heartland Payment Systems
Panelists
12:00p.m. Networking Lunch (Please take your belongings)
1:40 p.m. Breakout sessions begin
Today’s Schedule Update
1:00 p.m. Master Card presentation
Merchant Only
9:45 a.m. – 10:15 a.m.
Networking Break
MAG Member Education Opportunity
“An Introduction to the World of Retail Payments in the U.S.”
Education Level: 101
When: April 18, 2013 10:00 am – 3:00 pm
Where: Chicago, IL (McDonald’s Training Facility)
Presenter: Rene Pelegero
Available at no charge to MAG Members;
Registration starts end of February, watch for MAGMail and online.
Organizing for Mobile Commerce
Moderator: Tim Patterson General Manager of Payment Cards & Retail Services - Alon Brands
Barry Hanen Manager of Payments and Card Services – Walgreen Co.
Lisa Schiffer Manager, Electronic Payments – Dunkin’ Brands, Inc.
Maureen Elworthy Director of Treasury – Ahold
Panelists
Bank Perspective on Payments
Moderator: Dean Sheaffer SVP Financial Services/Chief Compliance Officer, Boscov’s
Benjamin Isaacson Executive Director of Payment Strategy
JP Morgan Chase & Co.
Dekkers Davidson Head, U.S. Mobile Commerce Business
Barclaycard, U.S.
Marc Keller Global Director, Digital Networks & Mobile
Citigroup Enterprise Payments
Panelists
12:00 p.m. – 1:00 p.m.
Networking Lunch
Upcoming MAG Events
“An Introduction to the World of Retail Payments in the U.S.”
April 18, 2013 Chicago, IL Details on MAG website and MAGMail coming soon..
Annual Conference
October 7 – 9, 2013, New Orleans
MasterCard Special Session
Colin McGrath V.P. of Operations & Infrastructure,
U.S. Market Development
Carolyn Balfany: SVP, U.S. Product Delivery
6:00p.m. Networking Social Hour
7:00 p.m. Dinner
This time is dedicated to networking with our sponsors. Enjoy!
Evening Schedule