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Industry Orgs Create Coalition To Promote Greater Card Payment Security

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Retail and payments industry leaders have come together to form the Secure Payments Partnership (SPP), a partnership created to promote security across the payments system. SPP marks the first time these interests—representing diverse parts of the payments system—have joined forces to address the ongoing battle against payment fraud and devise improvements for the U.S. card payment system. 

Founding members of SPP include NACS, a national association for convenience stores; the Food Marketing Institute; the National Retail Federation National; the Association of Convenience Stores; the National Grocers Association; First Data’s Star Network; and Shazam, a financial services provider.

SPP was formed to anticipate new and better technologies for making payments that are secure and fast.

“As it currently stands, the United States lags behind the rest of the world in card payment security as the two largest card networks control and set payment security standards without the expertise of others, including competing card networks, merchants, consumers and financial institutions,” said SPP in a statement. “SPP members believe all parties involved must work together to achieve successful payment security, increase transparency and limit fraud.”

The coalition cites a survey from the Aite Group and ACI Worldwide that showed 42 percent of U.S. cardholders (including debit, credit and prepaid cards) have experienced card fraud, compared with 27 percent of cardholders globally.

“On its current trajectory, U.S. payment fraud is expected to reach a whopping $14.41 billion by 2025, and as a country we are lagging behind our competitors,” said Hannah Walker, senior director of technology and nutrition policy for FMI. “This drag on our economy hurts U.S. customers, businesses and makes us less competitive globally.   Rightfully so, there is a shared frustration amongst FMI member payments professionals, asset protection and loss prevention experts, CIOs, CFOs and even CEOs regarding the lack of ability to truly tackle payment card fraud head-on using the strongest and most innovative technology.”

“As a founding member of the new Secure Payments Partnership, we are optimistic about how this unique collaboration of debit networks, payments processors and retailers can work together to strengthen the security of the U.S. payments system,” said NACS Director of Government Relations Anna Ready. “NACS believes that by working together we can address the structural problems in the current system and ensure everyone with a stake in payments has a voice in shaping the standards that impact each of us.”

“Payment security and the threats to it are only becoming more complex,” said Hugh Gallagher, SVP at First Data and head of the Star Network. “No single industry has all the answers to get us to where we need to be. We must work collaboratively with input from all parties with a stake in the outcome to improve payment security and limit fraud.”

The partnership also will focus on meeting consumer expectations for security, convenience and flexibility in payment options, especially as new technologies evolve and emerge.

“The payments system has to keep pace with rapidly evolving technology and the needs of consumers and commerce,” said Stephanie Martz, SVP and general counsel for the National Retail Federation. “The U.S. payments infrastructure should be the strongest, most innovative and most secure in the world, but we won’t get there unless we change the way we make security decisions.”

In recent years, a multitude of new technologies have been introduced to increase security, including mobile and wearable payments, biometrics (such as fingerprints, facial recognition, iris scanning and vein mapping), the use of artificial intelligence, geolocation, IP verification, blockchain and ultrasonic sound waves. SPP says it looks to harness these technologies to benefit all users.

“As innovation and technology continue to evolve and offer new ways to authenticate, we are committed to working in concert with our partners to address shortcomings in the payments system,” said Dan Kramer, SVP of government and community affairs at Shazam. “We look forward to working across the industry and with policymakers in Washington to implement real solutions.”

The group will emphasize several priority areas, including stronger user authentication, open standard setting and adoption, payment security innovation and network routing competition. 

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