Diplomacy, MasterCard-Style

Opinion: When MasterCard recently slammed a proposal from the National Retail Federation&#151saying an NRF statement was "inaccurate and unjustified," it forgot to mention one rather salient point: It agrees with the NRF proposal.

A school for diplomatic nuance, MasterCard aint. (My apologies for using the never-correct word "aint," but every so often, a journalist blogger must set aside rules of grammar for what simply feels right.)

Recently, MasterCard issued a statement in reaction to a National Retail Federation proposal that retailers should no longer be required to store credit card data. The NRF proposal argued that its safer to let the credit card companies hold that data, rather than having tons of retailers doing so.

Visa and American Express went mute on the subject, but MasterCard took an out-of-character move and issued a statement about the policy.

Heres where the diplomatic corps start to develop hives. The statement—read the full text of the statement here—was seemingly direct and even hostile, using such non-friendly terms as "inaccurate and unjustified."

Part of the difference could be chalked up to semantics. Although NRF did say that the credit card companies force retailers to retain the data, thats not technically true. The retailers could dump the data, but that would be ludicrous from a business perspective because it would expose the merchants to an unlimited number of undefendable chargebacks.

But it turns out that MasterCard didnt mention one rather salient point: It agrees with the NRF proposal and wholeheartedly supports retailers not having to retain full credit card data, according to Josh Peirez, a MasterCard official with the title "chief payment system integrity officer."

Seems that what got MasterCard upset and prompted the statement was that NRF mushed all card companies together. MasterCard encourages retailers saving only truncated account numbers, Peirez said.

The hiccup comes with one of the other major credit card companies, which Peirez declined to identify. (MasterCards new slogan: "There are some things money cant buy. For everything else, lets blame Visa.")

The argument—which is legitimate—is that it doesnt really matter what MasterCard or Visa or even American Express does. If they have different retention rules, retailers that accept more than one (which is pretty much every retailer that accepts any form of credit) are likely to go the most-conservative route.

In other words, until the major credit card players as a group adopt a consistent security position, even if one of the majors wanted to change, it wouldnt likely make much difference. (American Express and Discover, although important, are quite secondary. If MasterCard and Visa got together, that should do the trick.)

But if this is the kind of statement that MasterCard officials issue when they like, imagine what their statements say when they hate it?

Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at Evan.Schuman@ziffdavisenterprise.com.

To read earlier retail technology opinion columns from Evan Schuman, please click here.

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