NEW YORK – On July 13, Visa USA announced that it will make its operating regulations public to select merchants and third-party agents on September 1 under a non-disclosure agreement, reports CardLine.
“Merchants have long complained that Visa doesn't release its operating rules,” notes the news source, adding that rules, in printed form, “are reported to be four inches thick.”
According to CardLine, “Visa's release appears to be a part of President and CEO John Philip Coghlan's effort to mend fences with merchants. The rules release also comes amid a class action lawsuit by merchants against Visa and MasterCard over interchange pricing and policies and Senate hearings scheduled for next week on interchange.”
Visa posted the following statement to its Web site:
As Visa continues to grow and expand in today’s dynamic and competitive marketplace, we are committed to making the organization as transparent as reasonably possible. Greater transparency is one of the ways Visa is working to evolve for the future and to foster and expand our working relationship with new and existing partners and parties who seek to better understand our business. Visa has already demonstrated this openness with the publication of Visa USA’s Annual Report and the addition of independent directors to the Visa board. We are now taking transparency one step further by providing the Visa USA Operating Regulations to important stakeholders in the Visa system.
While Visa’s merchant rules guide has been available for over a decade, and it is among the most viewed documents on our web site, some merchants have asked us to provide even more detail. We are responding to this request by sharing Visa’s operating regulations with those qualifying merchants and third party agents who participate in the Visa system. The operating regulations will be available beginning September 1, 2006, and will be provided under a non-disclosure agreement to protect confidentiality.
Although the Visa Operating Regulations govern only our members’ participation in the Visa system, we believe they also help to demonstrate the complexity of our industry and the lengths to which Visa has gone to effectively balance the interests of our members, merchants, and consumers. In sharing them, our goal is to provide partners with the information they are interested in, without sacrificing Visa’s intellectual property or the security of the system.
In February, NACS President and CEO Hank Armour testified before the House Energy and Commerce Committee’s Subcommittee on Commerce, Trade and Consumer Protection during a hearing on credit card interchange fees. During Q&A discussions, committee members expressed disconcertion as to why both Visa and MasterCard do not make their operating rule available to merchants. Armour commented that Visa and MasterCard refuse to fully disclose their operating rules to retailers, even though retailers are expected to fully comply with all of their operating rules in order to accept their cards.
“It is remarkable that they [Visa and MasterCard] make retailers agree to abide by all of their operating rules in order to be able to accept their cards, yet they won’t let retailers see those rules. I find the lack of transparency by Visa and MasterCard to be outrageous,” said Armour. (Editors note: Click here to access complete coverage of the hearing, featured in the April 2006 issue of NACS Magazine.)
On Wednesday, July 19, Congress will again focus on the issue of credit card fees during the Senate Judiciary Committee hearing, “Credit Card Interchange Rates: Antitrust Concerns?” NACS 2004-2005 Chairman Bill Douglass, CEO of Douglass Distributing Co. in Sherman, Texas, will testify before the committee on behalf of the convenience and petroleum retailing industry.