MasterCard Goes All-In On Zero Liability

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Many of the rules surrounding consumer protection against unauthorized transactions are not only inconsistent, but also pretty dated. Nancy O’Malley, Group Executive and Chief Payment System Integrity Officer of MasterCard, briefed MPD CEO Karen Webster on its global initiative to modernize the zero liability promise to bring it up to speed with today’s digital marketplace.

Zero Liability is going global. At least for MasterCard consumer and small business cardholders.

In an effort to make current a standard that was established in the mid-1990s, MasterCard announced a change today to its Zero Liability policy for those two stakeholders. The global card network will make global its promise that consumers and small businesses are freed from having to worry about the risk and the burden of what happens in the event of unauthorized transactions.

The goal is to bring structure and uniformity to what is now a patchwork of liability rules that varies by region, types of transaction or, in some cases, both.

“There are intricacies in every region of the globe but in some places there are rules, or local laws quite frankly, that permit liabilities be passed on to consumers at different monetary levels and under different circumstances,” O’Malley explained.

“Some allow liabilities to be passed on for all types of transactions, while others limit that to lost or stolen card transactions, some have rules in regard to PIN transactions and others have no rules at all.”

While the execution of delivering Zero Liability to cardholders on a worldwide basis was a complicated process that took MasterCard well over a year to put in place, O’Malley said the program is a step in the right direction of providing a digital commerce environment where both consumers and issuers are protected.

To overcome the restrictions set in place by an outdated liability framework, MasterCard set out to develop a rule that could withstand a variety of jurisdictions and circumstances, and most of all be simple to understand.

“We wanted to construct something that was going to elevate everybody’s game, while also being confident that the rule was something [issuers] could support,” O’Malley stated.

One of the most important goals of the initiative was to take consumers’ confidence and trust in MasterCard to a new level by addressing the growing number of concerns surrounding data security and liability when the unexpected happens.

In today’s ever-changing payments ecosystem, where consumers are paying through multiple channels using a variety of payment methods, the demand for safety and security has never been higher.

“Consumers are very aware of and want all of us in the payments space to focus on delivering safe and secure environments for them. “[Zero liability] really goes to the heart of delivering against those expectations, not just meeting their expectations, but exceeding them,” O’Malley added.

Offering Zero Liability to all cardholders is another piece of MasterCard’s multi-layered approach to security and desire to up the game when it comes to offering this level of protection, because as O’Malley pointed out, “there is no one, single silver bullet.”

From securing the transaction and the network, to safeguarding accounts and cardholder data, keeping safe in the payments landscape is a strategic undertaking.

“It’s all of those things combined and the interplay of the solutions that we deliver into the market, together with our issuer, acquirer and merchant partners, that ultimately create a safe and secure ecosystem,” O’Malley said.