The Logic Group Blog

In Dec 2007 the European Commission announced that MasterCard had breached Article 81(1) of the EC treaty, prohibiting agreements and practices that could affect trade between Member States, by setting multi-lateral interchange fees (MIF) for cross border and domestic credit and debit card transactions in 8 member states. Legal wrangling and intense negotiations over the past 3 years have resulted in MasterCard undertaking to adopt certain measures to enhance the transparency of its payment card scheme, enabling consumers and retailers to make better informed choices as to which payment cards they use and accept. As a consequence in 2009, both MasterCard and Visa introduced rules mandating that all EU acquiring banks offer “unbundled” merchant service charges (MSC) from January 2011. But what does this all mean?

As the global economy slowly emerges from the downturn in what is becoming an ever more aggressive marketplace, organisations are seeking to gain that all important edge over their rivals, with many once again turning to technology to help maximise their competitive advantage.

At the turn of the century it was the rise of the internet and e-commerce that led the way in providing businesses with a new channel to market to compete against, or complement, the already well established retail outlet and call centre channels. In the new decade many are looking at the rise of mobile technologies, through the development of contactless, smartphones, and tablets to drive consumer demand for mobile commerce and mobile payments. However, as with all early technology advancements one solution doesn’t fit all and there are a plethora of technology options developing through numerous pilots to allow early adopters to test the market place. With countless technology manufacturers, systems integrators and service providers touting their wares and jostling for position it’s no wonder organisations are struggling to know where to start. So what’s it all about and haven’t we been here before?

The last few weeks have seen a slew of stories around introducing a new form of paper-based payments in to the UK market in order to replace the cheque. Here I will argue that we’d be better off concentrating our efforts on ensuring that viable digital replacements are in place rather than reinventing the wheel. But first a bit of history….