MasterCard: December PCI Deadline Change Not For Holiday Conflict

MasterCard's decision to reverse itself on its end of year 2010 deadline for new Level 2 PCI requirements was not based on retail complaints or on avoiding the hectic holiday period for merchants, according to a key MasterCard manager heading up the effort. Instead, the change was based on giving retailers more time to work with a new PCI training program, he said.

John Verdeschi, the senior business leader for fraud management at MasterCard Worldwide, said he had heard "no complaints" about the timing from retailers. "We didn't hear that as a specific issue," he said, adding that the PCI SCC's new training program was the only reason for the deadline change.

Another element of the December 13 change is a little less cut-and-dry. Until about three to four months ago—Verdeschi described it as "August or September"—MasterCard had posted on its site a description of the rules for which PCI level (1, 2, 3 or 4) it would consider retailers. MasterCard described parity with any "competing payment brand," wording that it had used since 2005.

But in "August or September," Verdeschi said, that wording was removed. "We needed to change this language because Amex, Discover and JCB programs are sufficiently different from MasterCard's and Visa's, and the 'competing brand' term was causing confusion. So to simplify, it now says 'Visa,' which again facilitates alignment of the MasterCard and Visa programs. And this is exactly what customers have said they wanted."

Added Verdeschi: "We started to get a lot of questions around that language, so we pulled that language" with the intention of replacing it.

The problem is the message retailers may have internalized during those three or four months, between when the initial phrasing was removed and the new phrasing posted. When MasterCard removed the "competing brand" wording and neither replaced it with anything nor added any explanation, some retailers interpreted it—reasonably enough—to mean that MasterCard had changed its policy. Not so, Verdeschi said. The policy hadn't changed; just the Web site phrasing did.

Verdeschi said he doubts there were a lot of misunderstandings because of the Web site and stressed that he had not heard any complaints about it. "Acquirers and merchants, I don't think they were confused by it," he said.

What MasterCard did with its actual policy change—the one posted on December 13—is a good move forward, bowing to the reality that Visa and MasterCard combined control such a huge percentage of the payment space in the U.S. that it truly makes sense for them to mirror each other as much as possible. And the other large card brands are indeed quite different.

But MasterCard's dismissal of the confusion caused by a 3- or 4-month disappearance of a few key lines of policy language is much less comforting. MasterCard must have understood that, in late 2009, retailers would assume that what is posted on its official Web site is in fact MasterCard’s policy. What took 3 or 4 months? If there was some heated debate going on internally, why not leave the old wording up until the new wording was ready? It's ironic that MasterCard is saying it removed the wording to halt confusion, when it's reasonable to suggest the move likely caused much more confusion than it cured.