Thursday, June 30, 2016

Retailers Applaud Circuit Court Decision Rejecting VISA/MasterCard Settlement

June 30, 2016 -- The Retail Industry Leaders Association (RILA), issued the following statement in response to a ruling from the U.S. Second Circuit Court of Appeals to throw out a grossly flawed settlement of antitrust litigation that had been filed to shine light on the illegally anti-competitive practices that Visa, MasterCard and the major banks use to set the fees that merchants -- and ultimately consumers -- pay on all credit and debit card transactions. As a member of the class, RILA formally opted out and objected to the settlement in 2014.
“RILA enthusiastically welcomes the circuit court’s decision to throw out this harmful settlement,” said Deborah White, executive vice president and general counsel. “Quite simply, the settlement orchestrated by the card networks and banks would have undermined merchants’ legal rights forever and would have allowed Visa and MasterCard to impose higher and higher swipe fees with impunity. Today’s decision is a victory for all merchants and consumers.”
Specifically, the court concluded that the class plaintiffs were inadequately represented in violation of Rule 23(a)(4) and the Due Process Clause. Accordingly, we vacate the district court’s certification of this class action and reverse the approval of the settlement.”
In a concurrence to the court’s decision, Judge Pierre Leval said, “This is not a settlement; it is a confiscation.” 
RILA, along with a majority of the named class plaintiffs and many more within the merchant community, has argued that the settlement fails to address the anti-competitive practices that were the genesis for the lawsuits and denies merchants their right to challenge these practices ever again in court. Specifically, RILA argued that the terms of the settlement:
  • Lock in the Visa/MasterCard duopoly,
  • Provide no relief from interchange rate setting or other rules,
  • Denies all current and future retailers their right to bring future legal action related to interchange rules and rate setting, among other things, against Visa, MasterCard and the banks, and
  • Could limit emerging innovations that can bring meaningful competition to the marketplace, such as mobile payments.

Tuesday, June 14, 2016

A Scary Peek Into Square’s New Privacy Policy

Payment Facilitator has an eye-opening run-down of the changes Square has recently made in its privacy policy for both merchants and their customers. “'These updates provide additional clarity and transparency, making our terms easier to read and understand. We encourage you to review the sections that apply to you, depending on how you engage with Square,' Square said in a Tuesday e-mail blast to customers.

"One document, for example, deals only with those who have applied for a Square account (overwhelmingly merchants) as opposed to consumers. Sometimes, though, a consumer is a direct Square customer but is not acting as a merchant (such as person-to-person transactions transferring money from consumers to consumers, and sometimes a consumer temporarily acts as a merchant (for perhaps a garage sale).

"That raises the prospect that this could prove more complicated because it will require people to read more documents."

Click HERE for the full Payment Facilitator article, and its likely consequences.

Monday, June 13, 2016

Retailers to FTC: PCI DSS part of an 'anticompetitive scheme'

In the ongoing saga that is the National Retail Federation vs. the major credit card networks, NRF has asked the Federal Trade Commission to investigate the Payment Card Industry Security Standards Council for possible antitrust violations.

PCI SSC is the standards-setting body established in 2006 by Visa, MasterCard, American Express, Discover and JCB and governed by representatives of those networks. Banks and merchants must implement security standards developed by the council or face banishment from network participation.

NRF's request comes as the FTC is conducting an inquiry into how third-party companies perform assessments of PCI compliance by retailers and other businesses that accept credit cards.

In a letter to FTC Chairwoman Edith Ramirez, NRF Senior Vice President and General Counsel Mallory Duncan wrote:

The following is from ATM Marketplace:

It is … our understanding that the FTC may be considering PCI DSS as indicia of industry best practices and/or reasonable data security standards.

We urge the FTC not to rely on PCI DSS for any purpose, particularly not as an example of industry best practices nor as a benchmark in determining what may constitute reasonable data security standards in the payment system or any other sector.
An accompanying white paper warned that the motivations behind PCI "conflict with the interests of businesses and consumers who use the payment card system":

PCI effectively stifles competition and innovation by consuming funds otherwise available for data security, and for adoption and implementation of new — possibly more secure — payment technologies.

The card networks, in other words, unfairly leverage their brands and proprietary technology through webs of closely-controlled interdependent bodies and compliance regimes. PCI is very much a part of this overall anticompetitive scheme. The FTC should be very wary of the nature of PCI and the effects of its standards and processes. Ultimately, PCI is a mechanism through which the payment card networks that control it unfairly leverage their market power.

NRF asked that the FTC investigate the council's practices in general and particularly their impact on competition. The FTC should also reject government use of PCI standards as any benchmark for data security, and instead work with "legitimate U.S. standard setting bodies" such as the American National Standards Institute, NRF said.

Wednesday, June 01, 2016

Cloud Vs. On-Premise Sales Tax Solutions

Download the White Paper from Avalara HERE.

50 States. 50 Sales Tax Rules. 100% Frustrating.

You can download a White Paper from Website magazine HERE.
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