I spoke to Mastercard last week regarding the various concerns merchants and trade associations have expressed about the new processing rules. While they appreciated my bringing these issues to their attention, they pretty much gave me the Heisman stiff arm, and said they are not inclined to change or suspend implementation of the new rules at this time.
Despite the various concerns and policy considerations I expressed, they said the new rules reflect their desire for a more transparent cardholder experience and empowerment, which they assume merchants would agree with. I told them merchants are very much aligned with these objectives, but that several of the new requirements do not seem to achieve those objectives, most pointedly the receipt following each transaction, and would place additional and unnecessary burdens on merchants, especially those that sell globally and must comply with multiple regulatory schemes in local jurisdictions. On this, they reiterated their position that in the event of a conflict between their rules and local laws, the local laws will govern, but they did not seem to appreciate that their rules effectively add another layer of operational complexity for merchants.
As for the transaction receipts in particular, they “fundamentally disagreed” with my concerns that these receipts, especially for monthly billed programs, are unnecessary and may lead to fraudsters sending copycat receipts with fake phishing cancel links and noted that this requirement is necessary in the event consumers miss seeing a recurring subscription charge on their billing statement. When I reminded them that consumers are responsible under their issuing bank cardholder agreement for reviewing their monthly statements, they effectively shrugged and said consumers can’t always be responsible for reviewing every charge they make. Yes, they said that.
They also noted that they are hearing and getting pressure from regulatory authorities across the globe that are reporting an increasing number of complaints about subscription offers, asking Mastercard why they aren’t doing more to protect cardholders. When I pressed them on why they had not engaged merchants to discuss these concerns before developing the new rules, they said they had, which I find difficult to believe given the dozens of well-known subscription merchants I have spoken to who claim they were never even notified about them. And while they said they value their relationships with merchants as much as cardholders, they don’t view the new rules as presenting too much of a burden as compared to the benefits to cardholders.
They admitted having heard from many merchants expressing similar concerns, but said they are not inclined to make any changes at this time, though if any merchant has specific concerns with the new rules, they would welcome hearing from them directly.
I have now heard from a number of sources that Mastercard has verbally informed its acquirers that it is considering delaying the effective date of its new Negative Option merchant billing requirements. According to these sources, Mastercard is likely to move the March 21 compliance date to the third quarter of 2022 and will be publishing this announcement in the coming weeks.
The saga continues . . .