CNP Expo: How I Learned to Stop Worrying and Love the Government
May 20, 2015
E-commerce payments companies should focus on regulatory changes that will complicate their business, according to Amy Pierce, attorney with Pillsbury Winthrop Shaw Pittman at a Wednesday afternoon session at the CNP Expo in Orlando, Fla.
“Arbitration clauses could be changed, so arbitration would be less available,” Pierce said. “Delaware is enforcing its unclaimed property laws that would affect prepaid cards,” she added, as examples of how government regulation can affect card-not-present merchants and service providers.
Payments companies are under attack by the government for very high fraud rates, said Jeffrey Thaler, global head of business development for BillTech. He noted a program called “Project Chokepoint” as an example. In this government effort, banks have been forced to shy away from doing business with gun dealers and other risky businesses for fear of being the subject of harsh regulations. Thaler calls it “regulation by intimidation.”
The most recent area that has invited government scrutiny is data breaches.
“We might not see many headlines yet, but we see breaches every day,” said Amy Mushahwar, counsel and chief information security officer at ZwillGen. “Nearly all of the companies I see breached are determined PCI compliant,” she said, noting that attempting to follow regulations no longer protects companies. She urged companies to deal with breaches by being transparent, which will allow the problem to be corrected. Also, she urged being responsive and dealing with the problem immediately.
“People get in trouble,” she said. “High numbers of chargebacks and card queries can get you audited and fines can be 10 percent of gross receipts.”
Foreign governments, however, can be even more difficult than the U.S. government, said one panelist.
“When someone says they have a full understanding of Brazil, maybe it’s not true,” said Alphonse Voigt, CEO and co-founder of Brazil’s EBANX. “It’s important to have local knowledge.”