GET helps Merchants Assess the Effect Visa’s Regulation Will Have on Their Ability to Partner with Third-Parties
Prohibiting Data Pass Protects Cardholders
Cypress, CA – May 3rd, 2010 – Effective Saturday, May 1st, 2010 Visa (NYSE:V) implemented a policy to prevent deceptive companies from taking advantage of cardholders.
During the Senate Commerce Committee’s (SCC) investigation of deceptive online marketing practices, Visa Inc. was made aware of the large scale use of a tactic called “data pass.” Data pass, commonly referred to as cross-selling, occurs when a familiar merchant offers third-party products or sales before an online checkout is complete. According to the SCC’s staff report dated November 9th, 2009, more than 35 million consumers have unknowingly been enrolled in these types of memberships since 1999, generating more than $1.4 billion (USD) in revenue as a result of data pass.
Merchants like Fandango, Orbitz, Pizza Hut, and many more were mentioned in the Senate report as generating more than $794 million (USD) from partnering with third-party firms like Affinion, Vertue, and Webloyalty. The SCC’s report contains a comment from a Webloyalty employee who explained that “at least 90% of our members don’t know anything about the membership.”
When asked about these statistics, Steven H. Bryson, Chief Executive Officer of Global Electronic Technology, Inc. (GET), explained that, “Many merchants are unaware, as well, about the deceitful nature of their referral partners’ tactics. Our goal is to assist merchants in navigating this environment in accordance with Visa Regulations. We are acutely aware of the negative impact this type of cross-selling is having on cardholders.”
While Visa’s rules already ban merchants from sharing cardholder information, the existing guidelines don’t prevent merchants from partnering with other companies. In an effort to crackdown on data sharing, Visa’s new guidelines will require third-party offers to be initiated as a new transaction in which the cardholder will be need to re-enter his or her credit card information.
“Consumers who shop online using their Visa cards should be confident that they will only be charged for the products and services they legitimately intended to purchase – not those that are foisted on them through deceptive data pass schemes,” explained Martin Elliott, Visa Inc.’s senior business leader for U.S. Payment System Risk in an April 27th, 2010 Visa press release.
“As a transaction processing firm that assists merchants with customer support, GET has experience assisting cardholders that fell victim to the deceitful tactic of data pass,” remarked Steve Bryson. “Having argued against and having written an article about these practices several years ago, I was not shocked to hear about the amount of profit these third-party agencies generate, knowing that individuals do not want their services. I thought, to be honest, that the Committee’s research might have found revenue in the multi-billions. At GET, we will be notifying merchants about the amendments to Visa’s Operating Regulations and are implementing a zero-tolerance policy for those who knowingly violate the Regulations.”
To ensure merchants are following Visa’s crackdown on data pass, the U.S. Regional Operating Regulations have been amended:
Section 5.2.I.1.b Merchant Disclosure
If the Merchant undertaking the initial Transaction has an agreement with another Merchant that allows the other Merchant to initiate a subsequent Transaction with the cardholder, the subsequent Transaction (after the initial Transaction has been completed) must be initiated as a new transaction such that:
· A separate transaction process is initiated
· The Cardholder is required to enter their Primary Account Number separately for the subsequent Transaction
· All other Transaction requirements comply will the applicable sections of the Visa U.S.A. Inc. Operating Regulations
Section 5.2.I.2.a Agent Disclosure (Op Reg ID 8027)
An agent must not disclose a Cardholder Account Number, or other Visa Transaction Information embossed, printed or encoded on a Visa Card to third-parties, other than for one of the following reasons:
· For the sole purpose of completing the initial Merchant Transaction
· As required by local law
· With the permission of the Issuer, Acquirer, or Visa, as specified in the Visa U.S.A. Inc. Operating Regulations
In response to Visa’s amendments, Senator John D. Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation was quoted as saying, “While I am pleased that Visa is changing its rule so that more consumers are protected, I still believe that legislation is needed to ban this deceptive practice once and for all.” He concluded his statement by ensuring that he would introduce legislation addressing the Committee’s e-commerce investigation in the near future.
Visa recommends that acquirers and merchants change their business practices to follow Visa’s amendment or risk losing their processing privileges. In a billion-dollar industry, it will be interesting to see how third-party firms that depend on data pass will respond to these new regulations.
About Global Electronic Technology, Inc. (GET)
Global Electronic Technology, Inc. (GET) is a leading technology provider of end-to-end payment processing solutions, including virtual terminal, payment gateway, shopping cart, on-line ACH, loyalty and gift card programs. Founded in 2000 by Steven H. Bryson and currently privately-owned, GET had grown to epitomize the word “global”, by offering state-of–the-art payment processing product and services to diversified industries, extending from retail to internet-based transactions in the worldwide payment industry. For more information about GET’s products and services, please visit www.gettrx.com or call (888) 775-1500.
Global Electronic Technology, Inc. is a registered ISO/MSP for Merrick Bank, South Jordan, UT, FDIC insured.
Copyright © 2002-2008. Global Electronic Technology, Inc, All Rights Reserved.
GET Helps Merchants with new Visa Reg.
GET helps Merchants Assess the Effect Visa’s Regulation Will Have on Their Ability to Partner with Third-Parties
Prohibiting Data Pass Protects Cardholders
Cypress, CA – May 3rd, 2010 – Effective Saturday, May 1st, 2010 Visa (NYSE:V) implemented a policy to prevent deceptive companies from taking advantage of cardholders.
During the Senate Commerce Committee’s (SCC) investigation of deceptive online marketing practices, Visa Inc. was made aware of the large scale use of a tactic called “data pass.” Data pass, commonly referred to as cross-selling, occurs when a familiar merchant offers third-party products or sales before an online checkout is complete. According to the SCC’s staff report dated November 9th, 2009, more than 35 million consumers have unknowingly been enrolled in these types of memberships since 1999, generating more than $1.4 billion (USD) in revenue as a result of data pass.
Merchants like Fandango, Orbitz, Pizza Hut, and many more were mentioned in the Senate report as generating more than $794 million (USD) from partnering with third-party firms like Affinion, Vertue, and Webloyalty. The SCC’s report contains a comment from a Webloyalty employee who explained that “at least 90% of our members don’t know anything about the membership.”
When asked about these statistics, Steven H. Bryson, Chief Executive Officer of Global Electronic Technology, Inc. (GET), explained that, “Many merchants are unaware, as well, about the deceitful nature of their referral partners’ tactics. Our goal is to assist merchants in navigating this environment in accordance with Visa Regulations. We are acutely aware of the negative impact this type of cross-selling is having on cardholders.”
While Visa’s rules already ban merchants from sharing cardholder information, the existing guidelines don’t prevent merchants from partnering with other companies. In an effort to crackdown on data sharing, Visa’s new guidelines will require third-party offers to be initiated as a new transaction in which the cardholder will be need to re-enter his or her credit card information.
“Consumers who shop online using their Visa cards should be confident that they will only be charged for the products and services they legitimately intended to purchase – not those that are foisted on them through deceptive data pass schemes,” explained Martin Elliott, Visa Inc.’s senior business leader for U.S. Payment System Risk in an April 27th, 2010 Visa press release.
“As a transaction processing firm that assists merchants with customer support, GET has experience assisting cardholders that fell victim to the deceitful tactic of data pass,” remarked Steve Bryson. “Having argued against and having written an article about these practices several years ago, I was not shocked to hear about the amount of profit these third-party agencies generate, knowing that individuals do not want their services. I thought, to be honest, that the Committee’s research might have found revenue in the multi-billions. At GET, we will be notifying merchants about the amendments to Visa’s Operating Regulations and are implementing a zero-tolerance policy for those who knowingly violate the Regulations.”
To ensure merchants are following Visa’s crackdown on data pass, the U.S. Regional Operating Regulations have been amended:
Section 5.2.I.1.b Merchant Disclosure
If the Merchant undertaking the initial Transaction has an agreement with another Merchant that allows the other Merchant to initiate a subsequent Transaction with the cardholder, the subsequent Transaction (after the initial Transaction has been completed) must be initiated as a new transaction such that:
· A separate transaction process is initiated
· The Cardholder is required to enter their Primary Account Number separately for the subsequent Transaction
· All other Transaction requirements comply will the applicable sections of the Visa U.S.A. Inc. Operating Regulations
Section 5.2.I.2.a Agent Disclosure (Op Reg ID 8027)
An agent must not disclose a Cardholder Account Number, or other Visa Transaction Information embossed, printed or encoded on a Visa Card to third-parties, other than for one of the following reasons:
· For the sole purpose of completing the initial Merchant Transaction
· As required by local law
· With the permission of the Issuer, Acquirer, or Visa, as specified in the Visa U.S.A. Inc. Operating Regulations
In response to Visa’s amendments, Senator John D. Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation was quoted as saying, “While I am pleased that Visa is changing its rule so that more consumers are protected, I still believe that legislation is needed to ban this deceptive practice once and for all.” He concluded his statement by ensuring that he would introduce legislation addressing the Committee’s e-commerce investigation in the near future.
Visa recommends that acquirers and merchants change their business practices to follow Visa’s amendment or risk losing their processing privileges. In a billion-dollar industry, it will be interesting to see how third-party firms that depend on data pass will respond to these new regulations.
About Global Electronic Technology, Inc. (GET)
Global Electronic Technology, Inc. (GET) is a leading technology provider of end-to-end payment processing solutions, including virtual terminal, payment gateway, shopping cart, on-line ACH, loyalty and gift card programs. Founded in 2000 by Steven H. Bryson and currently privately-owned, GET had grown to epitomize the word “global”, by offering state-of–the-art payment processing product and services to diversified industries, extending from retail to internet-based transactions in the worldwide payment industry. For more information about GET’s products and services, please visit www.gettrx.com or call (888) 775-1500.
Global Electronic Technology, Inc. is a registered ISO/MSP for Merrick Bank, South Jordan, UT, FDIC insured.
Copyright © 2002-2009. Global Electronic Technology, Inc, All Rights Reserved.