Episode 232 – Talking Payments and Fraud with Julie Fergerson, Merchant Risk Council

Yvette Bohanan

February 14, 2024

POF Podcast

In this episode, Glenbrook Partners Yvette Bohanan, Russ Jones, and Chris Uriarte sat down with Julie Fergerson – a long-time payments professional who co-founded the Merchant Risk Council in 2000 and returned a few years ago to take on the role of CEO for what is now an industry-leading, global non-profit.

We talk with Julie about how the payments industry has changed over the last two decades, with both the professionalization of payments and of fraud, and why she is now spearheading a certification program for the industry.

True to form, we also had to share our hot takes on topics such as “pay by bank”, and the looming US Credit Card Competition Act. We hope this inspires you to think about your personal career path in payments and your role as a leader in this industry.

Be sure to check out Glenbrook’s preparation course to help you demonstrate your command of payment and fraud knowledge and get ready to take the CPFPP exam.

 

 

Yvette Bohanan: Welcome to Payments on Fire, a podcast from Glenbrook partners about the payments industry, how it works and trends and its evolution.

Yvette Bohanan: I’m Yvette Bohanan, a partner at Glenbrook and your host for Payments on Fire. If you listen to our podcast, and by the way, thank you for listening, congratulations. You are a payments geek. Somehow, somewhere, you were transported into this industry and haven’t found a way to escape it. Perhaps you were involved in a startup and had to figure out how to get paid for your new product, and then became so frustrated that you decided it was high time to fix a few things about payments.

Or you graduated with your MBA, took a job at a bank, and suddenly found yourself on the card product team. Perhaps you were in the investment community and realized that there might be a reason to get smart about fintechs, no matter which path brought you to this place. And there are many ways to get here.

Here you are. But what does it mean to be a payments professional? And how do you convey your mastery of this dynamic, complex industry? If you’re a hiring manager, how do you know someone is qualified to oversee such a sensitive, regulated area of the business? Many people who have participated in our workshops have asked us these questions.

In this episode, we sit down with Julie Fergerson, CEO of the Merchant Risk Council, to learn about their Certified Payments and Fraud Prevention Professional Program, or CPFPP. Julie has been part of the MRC since day one and has been a leader at several exciting startups throughout her career. She herself is a payments geek.

If you are unfamiliar with the Merchant Risk Council, MRC, it’s a non profit organization founded in 2000 when merchants venturing into the nascent e-commerce space were getting hit with fraud, something they had never experienced before. Today, the MRC has over 750 member companies, each generating at least $50 million in annual e-commerce sales.

From these companies, 9,000 individuals participate in the MRC across four regions, North America, Latin America, APAC, and Europe.

We’ll jump into several topics in this discussion, the professionalization of the payments industry, the professionalization of fraud rings, and what is top of mind for payment professionals like you who wake up every day to live the dream. Joining me for this conversation are Russ Jones, a Glenbrook partner who leads our education practice, and Chris Uriarte, a Glenbrook partner who often finds himself at the intersection of merchant acceptance and payments risk management.

Chris Uriate: Oh yes, for sure. Hey.

Russ Jones:, You know, I was out for a stroll today through the payments industry and I happened to wind up here of all places.

Yvette Bohanan: Lucky us. It is always a pleasure to have you both on a podcast and Julie, Julie, welcome to payments on fire.

Julie Fergerson: Thanks for having me. I feel like I’m in the audience with greatness.

It’s exciting to be here.

Yvette Bohanan: We feel exactly the same way. This is going to be fun. You haven’t been on payments on fire. Yet ever. This is your debut. Oh, I’m going to have to make sure we get some really good juicy sound bites from you.

Russ Jones: And now featuring Julie Fergerson.

Julie Fergerson: That’s right. This is amazing. No pressure, oh my goodness.

Yvette Bohanan: So as you know, I think you are a listener, so thank you for that. As you know, we often start an episode by asking our guests to tell us how they got into the payments industry. And I’d love to hear that from you and if you could share it along with kind of the origin story of the MRC and what those early days were like, that would be great.

Julie Fergerson: Yeah, so back in the 90s, when I started my career at IBM, I was also a childhood nerd and was on computer bulletin board systems. It was called ARPANET back then, but long before the internet. And there was a lot of shareware technology out there that software developers published and then they hoped that somebody would mail them a check.

And at IBM I had a person on my team that was in charge of research and I saw the evolution of HTML and the web, and I was like, this is going to be so amazing. And so I decided to help a couple of my friends who were shareware developers figure out how to build a webpage and collect payment.

And, you know, I started my career coding a little bit as well. And so I wrote that first version of our gateway at my first company. And the rest kind of just took off. When we started, there was no, you could surf the entire web in a couple hours. And, so it was really small back then. But we built Tupperweb, where my friend who sold Tupperware was on there and software to write to your politicians and all kinds of interesting things.

And what was really fascinating is the very first day, we had our first transaction. The very next day, we had our first fraud attempt. And, what we saw is, we’ve always coined the phrase, payments and fraud is like breathing in and out. And I didn’t start out thinking, oh, I wanted to be in the payment industry, but I got hooked.

I got hooked watching money come in, love money, but I also loved watching the crooks and how creative they were in trying to stop them. It was a fun game.

Yvette Bohanan: Wow. And at what point did it get large enough that you started to realize other people realized that there was this sort of aspirations, breathing in and out, right, that that was going on in payments that was different when you hit the web? At what point did that occur for you?

Julie Fergerson: I think I saw the opportunity, so we put up the website, and I think we had our first sale within a week. And I was like, oh my gosh, this is going to change the way the world operates, because I actually don’t enjoy shopping, so I think that it is something I just have to do, it’s not fun. And so I just started thinking, oh my gosh, I could never go in a store again, I could just do click, click, click, and have stuff arrive. And some of my friends thought I was absolutely crazy, but I quit my job at IBM to start my first payment gateway company.

Yvette Bohanan: And what company was that?

Julie Fergerson: Clear Commerce.

Yvette Bohanan: Okay. And so you had a payment product and a fraud product, if I recall correctly, back in the day, right?

And then we hit, I think it was sort of the retail busy season of 2000, right? 99 going into 2000. And I have a very sort of parallel journey for me. I wasn’t at IBM, but I was doing work for digital and network programming and saw the same developments.

And what’s interesting is you started MRC just around that time, if I recall, because that was the season where it all, like, everything hit.

Julie Fergerson: Yeah, the way MRC came to be is we saw all of our customers being attacked by the same criminals and having the same problems. And because I had grown up kind of as that, you know, childhood hacker, computer nerd, I knew that the criminals were well connected and sharing all their information.

And so the thought was, hey, let’s get a couple of merchants together and see if they can share information. And actually there was a historic lunch with Apple, HP, and Dell here in Austin, Texas. And everybody was a little skeptical. Oh, is this going to work? But they quickly became friends and realized that the common enemy is the fraudster.

And from there we started having monthly calls and the MRC really just grew out of that. We were lucky that American Express at the time wanted to start a nonprofit to help the industry. And so they actually provided the infrastructure and the legal structure for the organization. And from there, we just exploded in growth because fraud was a serious problem back then.

In fact, it was not unusual for a company to have to include their fraud losses on their 10-K filings. And that’s a bad day when you’re having to talk about that on your, your earnings calls.

Yvette Bohanan: That’s right.

Russ Jones: For listeners that aren’t super dialed into the lingo, what’s MRC stand for?

Julie Fergerson: It stands for Merchant Risk Council.

Russ Jones: Thank you very much.

Julie Fergerson: And I just want everybody to know, though, that 50 percent of what we do is payments and 50 percent of what we do is fraud. So back when we started, it really was in the fraud side, but very quickly within a couple of years, it became obvious we couldn’t talk about one without talking about the other.

Russ Jones: And for those same listeners, it’s fraud prevention, right?

Yvette Bohanan: Yeah risk management, fraud prevention. We know you’re on the good side, Julie. So how’s the membership changed over the years? Because now you sort of fast forward 20 plus years. What’s the complexion of your base now of members?

Julie Fergerson: Yeah, so our members are merchants who are $50 million or more in e-commerce annual revenue.

And I always like to say it’s the who’s who of e-commerce. So it’s anybody who does business online, because pretty much you’re going to have a fraud problem. And so, Apple, Microsoft, Google, Sony, Best Buy, Walmart, all those guys are members of the MRC. And because we are a nonprofit, it gives us that neutral place where people can share information and we can help facilitate different things. We work on advocacy for our merchants, but we also work on best practices and how we engage our solution providers to hear what the problems are so they can build awesome solutions to solve the problems.

Chris Uriarte: Yeah. I think Julie, one thing that I’ve noticed over the years, and I think my history with MRC probably goes back to MRC Vegas conference number two.

So I’ve been around and have seen the journey on the outside, which has been really just incredible and amazing.  It seems that the composition of merchants has really changed a lot as well and I think we kind of see this in the industry even with the customers that we have here at Glenbrook. And you talk about how it was initially e-commerce, I would say traditional merchants where people would be shopping online. But we see examples of, we have a client who has historically produced heavy machinery and farm equipment, and all of a sudden in the last couple of years, they’ve built a payments team and a fintech team of 30 or 40 people because they’re innovating around how they go to market and how people can pay them and how they could bring new products to market.

So I think the nature of the makeup of the MRC members has changed as well. Wouldn’t you agree?

Julie Fergerson: Absolutely. In fact, early on, a lot of the people who were the fraud prevention specialists were the same people who were chasing the guy stealing stuff in the store. And so we’d be sitting around the table talking about, yeah, I tackled this guy in the parking lot.

And now, people have college degrees and they’re really having a finance background or at least some sort of math background when they’re working on the payments or data analytics on the fraud side. So it’s definitely become a professional career.

Yvette Bohanan: That’s a perfect segue. So you were at the, kind of the spearheading this whole, get everybody together, band together, figure this out.

More brains, more eyeballs, more communication is needed. You’re now sort of in this space where you’re spearheading professionalization through a certification program for the industry. What did people say to you that prompted you to kind of go in this direction and create a certification program?

Because this is a heavy lift. This is not an easy thing to do, just to put it out there.

Julie Fergerson: When I started at MRC as the CEO about three and a half years ago, I had no idea how hard it was going to be and how heavy a lift it was. But our members were absolutely saying, “Hey, we all need to be able to interview folks and know, are they really a subject matter expert or what are their gaps?” “I don’t have career paths for my team and that’s a job dissatisfier and it impacts retention.”

We had some of our members saying, “Hey, I want to grow, but I don’t know how to go to the next step.” And a lot of our members always said, “how do I even learn about payments? You know, what, what’s the path and what can we do and what are we missing?”

And so it was really our members pushing to say, hey, we need a standard way to create education. We’ve even had a couple of universities reach out since we’ve launched the certification saying, hey, can we build this into our curriculum? And then we’re like, yes, but let us have a couple of baby steps first. But there’s definitely a need for somebody to have a path.

It used to be, the way I learned my knowledge, and I’m sure Russ and Chris are in the same boat, right, is you just asked a lot of questions and got insanely curious and you spent a lot of time sitting in front of a computer watching what merchants are doing.

Russ Jones: And it’s also a lot of just about networking with people, sort of like things are sort of passed down anecdotally. This is what happened to us. You should keep your eyes peeled for this. You can ask somebody what’s really going on behind the scenes here. That’s really the same thing that’s drives our education program, is people really want to know how payments work.

They’re fascinated by the idea that you can move money instantly. It’s moving. It kind of goes back to what you were saying initially when, what drew you in to this whole industry, it was the money, keeping your eye on the money. When that first order came in, you’re like, holy cow, something just really happened here.

Yvette Bohanan: Yeah. Not an abstract sort of thing.

Julie Fergerson: Yeah. Every Friday night we used to go in the server closet, turn on the green screen, on the main server, and watch the transactions roll with the beer and a glass of wine. It was so fun.

Chris Uriarte: The points that you guys are bringing up is really relevant in regards to what we’ve seen in the evolution of these roles, right?

Like Julie said, it initially was quote unquote loss prevention when this first started. The same folks that were trying to find shoplifters. And then, the focus, as you said, Russ, was very much on the money, right? So you typically had some poor guy or gal in the finance department or accounting group that wound up getting pointed to and said, you, you’re in charge of looking after this.

And they had no background. There was no mechanism to get any sort of education, but now it’s really morphed into its own thing. And, we see payments really living in a lot of different types of areas within a business. They’re not always associated directly with finance. Sometimes they’re associated with operations, with products, with partnerships in different roles.

So it really has morphed into something unique that I think has a requirement to have its own track from an education perspective, like any other discipline in a business.

Yvette Bohanan: Yeah, for sure. I don’t know if I should say you took the bait or picked up the mantle, Julie. You did that, something about this was really important to you personally to sort of pursue this once you returned to MRC and you were at the helm.

What is important about this from your perspective? Why was this thing that you really needed to make sure happened?

Julie Fergerson: I think it’s important to me because I really want to give back and I want this industry to be able to grow and I don’t want the bad guys to win, right? So I think there’s two components, right?

I want to give back, but I also want to make sure that everybody wins, the good guys win.

Yvette Bohanan: Fabulous. And who developed this with you?

Julie Fergerson: So, I’d actually say it’s a whole team of people. I certainly, sign the budget and provide a little direction, but, um, MRC has an education committee, which is a group of amazing volunteers.

In order to even create the certification, there’s a team of people who create the questions, a different team of people who review the questions in order to be accredited. There’s a lot that goes into it. And there was easily over a hundred people who volunteered to bring the certification to market.

And even to maintain it and pass the certification, it’s a team of people constantly doing different activities to make it happen.

Yvette Bohanan: You have a magnificent volunteer base. So if you’re out there listening and you are looking for a place to volunteer in this industry and get to know people and do some good work, and have a lot of support doing it, this is a wonderful organization to get involved in. So it’s cool to see 100 people. It’s a lot of work. That’s a lot of hours going into this to bring it to life.

Who should enroll in the program? Is it always for like new folks coming into the industry? Is it for people that have been around the industry for a while?

Who’s the target?

Julie Fergerson: I would say it’s anybody who really wants to prove themselves. That they know something. I’ve been in this industry a long time, but when I went to study for the test, I found I had gaps. And so I was able to go and study and fill those gaps. And I think I’m a much better, more well-rounded person having studied and taken the test and thank goodness passed.

But even people who are just starting out their career, it’s a great thing, a great way to start to say, hey, what do I need to do to move up to that next level in my career? And I think even for people who are product managers or even people who try to sell to merchants, this is a really good thing because it kind of levels the playing field on words and knowledge and how we communicate.

Because one of the biggest challenges in our industry is when I say, what’s your auth rate? That means something different to every single merchant on the planet, right? You could do a whole hour podcast on just what is an auth rate. And so if we can start to get some common vocabulary, it makes the conversations much more productive.

Yvette Bohanan: So when you launched it and you started to get some feedback about this, besides your own experience and going through the program, were there any aha moments or, whoa, I never thought I’d heard, would hear anyone say that about this, things that people came to you and told you about?

Julie Fergerson: Yeah, the thing that really, really shocked me is a lot of people are afraid to take a test.

So I guess I’ve been blessed. I don’t have the test anxiety gene. I was like, I’ll go take it. I’ll either pass or fail. And if I fail, we’ll laugh about it and I’ll try again. But so many people have test anxiety and they’ve told me, boy, I really want to take it, but I’m so nervous. And I always say, what’s the worst that can happen?

You’ll fail. You’ll know what you need to go study and then you go study it. But, it is a very real and serious thing and we’ve even had people sign up for it and call me an hour before. “Are you sure I’m going to pass?” And, they just need that cheerleader. It’s really shocking to me how scared some of the smartest people, way smarter than me, have had some fear of taking it as a little test.

Russ Jones: You have a driver’s license, Julie?

Julie Fergerson: I do.

Russ Jones: How was that experience? Were you scared?

Julie Fergerson: Not at all. When my kids went through the process, I was like, what are you guys worried about? And my daughter did take it three times, but yeah, it’s, I always say, what’s the worst that can happen?

It’s just, it’s okay to fail. That’s how you learn.

Yvette Bohanan: So we’ve been collaborating with you. I guess this is a good time to bring this up for folks. If they have test anxiety or they feel like, ooh, I may have some gaps here, I better prep for this. Russ has been working diligently with your team and we’ve all been here supporting him to create a prep course.

So, hopefully that’ll help people. And it’s kind of a lightweight way to get into this.

Russ Jones: When we sat down to look at, how could we put together a preparation course for this certification program? We were sort of looking at holistically from our point of view, not just what do you need to know to pass the test?

It’s not that type of preparation. You do learn the fundamentals of the payments industry, but as you would in any of our workshops and any of our courses, you would learn not just how things work, but why they work that way. Like, why are there chargebacks? You know, chargebacks are not a law of gravity type of thing.

So people who go through our workshops usually give us super good feedback that they appreciate understanding not just what’s the outcome. What goes into it? Why does it work this way? What’s the theory and stuff like that? And of course, the vocabulary is super important. And we really stress in all of our workshops, vocabulary, vocabulary, vocabulary, because the industry is all over the place.

Different words mean different things. Sometimes you can take it a single piece of terminology in the industry, it means three different things. And depending upon the context, other times you can take one thing and call it five different things.

And people ask questions in our workshops all the time, what about this? And, the answer is, well, we just got done talking about it, except it’s actually called this, called something else. But the final thing I want to say about it is, is this preparation training is 20 hours. And it’s not 20 hours by design. We didn’t set out to make a preparation course that was 20 hours.

We let the certification program guide us into what was needed. And we didn’t know, was this going to end up being an 8-hour course, a 30-hour course? We just looked at what was there. And there’s a ton of stuff in the industry that people need to be aware of and be smart about. So, if you’re going to hang your hat on a mantle and say you’re a certified payments professional, there’s a lot to know in this industry. It’s not a check the box and go on to my next interview.

Yvette Bohanan: It’s interesting because it’s such a big topic and this is sort of the baseline that you’re establishing here, if you want to be recognized as a leader here, if you want to be recognized as a professional, this is what you need to know. And then I’m imagining it’s going to build from there over time, because there’s a lot, and it’s always changing.

So I think this is also a good way to prompt yourself, there’s a continuing education portion to this program as well, right?

Julie Fergerson: Yeah. Yeah. I think the other thing is we’re already starting to see some of our members putting “CPFPP certified” preferred on job ads.

And I caught myself just the other day, I needed to find a subject matter expert. So I went to LinkedIn and I just typed in CPFPP and the list came up of all the CPFPPs that have passed the test. And it was really an awesome and cool diverse list of people who are subject matter experts in the industry. And so I think as more and more people pass it and are aware of it, we’ll start to see those folks recruited, getting promotions within their job.

One of the interesting facts our education team shared with me is on average, if you have a certification, you’ll make about 17 percent more than people who don’t have a certification. So I’m super excited to start to measure that as well.

Yvette Bohanan: Very interesting. Very interesting.

Russ Jones: Chris, you want me to certify you right here on the spot?

Yvette Bohanan: Actually, you can only do the prep course. We don’t know the questions to the test, so.

Chris Uriarte: That’s true. That is true. We don’t know the questions. We can’t certify you.

Yvette Bohanan: Only the MRC can certify. It’s 20 hours, but it’s in bite sized chunks. So I think you should say that, because people are going to be like, 20 hours?

Russ Jones: It’s two hours a week, and it’s set up as a lunchtime brown bag type of course, where every Friday for two hours, right at lunchtime, you can just go a little bit early to lunch and stay a little bit longer than lunch and over 10 weeks, you’ll get a ton of baseline knowledge about how the payment system works.

Yvette Bohanan: Good refresher.

Julie Fergerson: Good prep. Yeah.

Chris Uriarte: And Russ, if you miss one of those 10 weeks, you can go back and you could pick up the recording as well. Right?

Russ Jones: Yeah. They’re going to be all recorded, this is done virtually. All the sessions will be recorded and the recordings will be released on a week to week basis.

Yvette Bohanan: Great. All right. All right. So we’re going to get ready. We’re going to professionalize this already professional, but not recognized as a profession part of the world. This is cool. This is very cool. We’re actually very, very excited to be collaborating with you on that.

Julie Fergerson: Yeah, I’m so excited you guys are putting together a program.

I expect everybody now to pass the test because the test anxiety probably will be gone. Absolutely. No pressure.

Yvette Bohanan: No pressure on the facilitators here. So, you know, I have you all here. I can’t waste this opportunity. I can’t miss this moment to talk payments because we’re all a bunch of payments geeks. And I’m going to go back to something we touched on a little bit earlier that Chris sort of picked up on about the example of our client in the agriculture business suddenly having 35 people who are focused on payments and it brings to mind that quote from Angela strange at Andreessen Horowitz from several years ago. She was talking about fintechs, and she said, “in the future, every company is going to be a fintech company”. And my question to you all is, are you seeing a shift here, a fundamental shift in this industry, in this payments industry, in this risk management industry, where we’re going from more of that operational role to a more strategic function within a corporation. Is it that fundamental at this point?

Julie Fergerson:  From my perspective, it absolutely is. I can tell the level of engagement from our merchant members. It’s much more senior people now participating, really starting to understand how things work. The C suite is often involved. It’s becoming a part of a strategy now instead of just the cost of doing business.

And in operations, it’s really becoming, hey, how can we be different? Especially as the omni channel has collapsed and you know, there’s card present and card not present and curbside pickup and all those great things. Great customer experiences set businesses apart.

And so we’re really seeing it. Okay, how do we make payments strategic so we can create that great customer experience? And the other data point that we have is that every business is now joining the MRC. So traditionally it was more people who sold stuff online, but now we are seeing grocery stores, with, they have a lot of it with self checkout and curbside pickup.

So they have a lot of card present, card not present volume. Hospitals. If you think about it, you now check in online, you pay from your app. You really don’t swipe a card at the register anymore. So we really are seeing, because of the apps and the way businesses are approaching, everybody’s basically getting in the payments business.

Russ Jones: There’s a saying I like a lot that there is no such thing as a low tech industry. There’s only low tech companies. So I’m not surprised, Chris, that your, farm supply manufacturers is super amped up on payments because farming, it’s a very high tech industry. You might not think it when you drive down the street and see someone pulling a plow out in the field, but it is a very high tech industry and all industries are high tech and high tech is high touch payments too.

Chris Uriarte: Yeah, it is. And the other issue that you folks are bringing up is payments is becoming a differentiator between organizations, right? Organizations that are more innovative. Organizations that are more “high tech” to continue to use that term can outperform others in regards to making more sales, being more successful at checkout with conversion, enticing new types of consumers that maybe didn’t have access to their product or service before.

So it’s more than just sort of the “old utility model” that it used to be, right? There’s a lot of opportunity for innovation and differentiation here for sure.

Yvette Bohanan: It’s really both. So it’s getting very strategic. Everybody needs to sell. We’ve gone through at least one year of efficiency, right?

Yeah. These things come and go. We’re, by all indication, we’re in our second year of efficiency here, sitting here today. But there’s also this operational aspect, too, that’s getting really interesting and strategic, where the back office function of AP/AR is an order to cash or whatever quote to whatever people call it.

And from the finance side of things, it’s starting to meld with the front of the house and all of this unified commerce omni channel stuff that’s going on, people are starting to put siloed organizations together in a different way. And looking at the operations, looking at the strategy and kind of bringing it together in a way that they really haven’t before, it’s really been two very different worlds in a lot of places.

I think there’s a lot of transformation. We’re seeing this in product offerings coming out from Stripe or Adyen and that they’re starting to pay attention to the back office. And that was always the realm of like the SAPs and the Oracles and the ERP systems and the NetSuites. And they’re starting to bridge a gap that’s been there, in a very interesting way, too.

So, as we said, it’s all changing. It’s always evolving. Then we have fraud rings. You can’t have Julie on an episode of Payments on Fire and not talk about fraud, right? So we’re saying we’re going to professionalize payments more with certification and we also talk about the professionalization of fraud over the years and it’s a very serious thing actually.

But what has been most alarming to you in the development of the globalization and professionalization of fraud that you’ve seen over the last couple of decades?

Julie Fergerson: The thing that has scared me the most is the speed at which the fraudsters get their information and the speed at which they find a loophole or something that works, it’s in their best interest to share it with as many people as possible because it makes it harder to catch them And so the speed at which things happen from the fraudsters really is scary.

And then you now combine that with some really sophisticated tools that don’t take much know how to use.

Yvette Bohanan: So, Julie, I hear what you’re saying, though. It’s the speed. And I think your point about it’s in their best interest to share information so that it’s harder to catch them and pinpoint their activity and of course the corollary is it’s in our best interest to share information right so that we can figure out how to stop it.

Julie Fergerson: Yeah, that that’s why the MRC exists, but the other component in addition to the speed that really terrifies me is all these new technologies that are evolving and how easy they are to use, it’s super simple to make a deep fake video. We already saw some merchants this last fall, we had two merchants at one of our conferences talk about how deep fakes were being used to trick their customer service folks into thinking it really was the person. It’s dropping the barrier for languages because you can record a video and push boom and it’s in 50 languages so you can now commit crimes in a bunch of different countries instead of just where you.

And then lots of the technologies have made it so you can just type what you want to code without coding. And so that stuff is absolutely terrifying. And I think as we watch the industry, that’s the thing that I’m keeping the closest eye on. And we’re working closely with our merchants to see kind of the leading edge, and it almost reminds me of back when data breaches first started happening because there was a time when there wasn’t data breaches and we were looking going, oh, that’s going to be really bad.

And I kind of feel like that in this moment, when I think about how fraudsters are using AI and deep fake technology.

Yvette Bohanan: Anything you want to add, Chris?

Chris Uriarte: I think agree with Julie. It’s the thing that we always have to keep in mind is the fraudsters are always one step ahead of us, right? We’re always playing catch up in this game.

We’ve got a lot of things that we have to deal with from a day-to-day perspective in our everyday jobs. Even if you’re a professional fraud fighter, you still go home. At night, you spend time with your family, you spend time with your kids, the fraudsters are working 24/7 at a scale that has just become incredible over the course of the year.

So, you know, keeping up and keeping ahead of them is always a challenge.

Yvette Bohanan: What’s the most promising development that you’ve seen coming out in terms of controls?

Julie Fergerson: So I’m most excited about the identity verification and authentication and what’s possible with the technologies. I haven’t seen anybody yet have the one that I go, yep, that’s the winner and it’s easy to use and it really does work.

But I think our ability to have a digital identity and protect stuff is probably, from my perspective, the most exciting innovation that might happen to help us combat some of this stuff.

Yvette Bohanan: I think you’re spot on. It’s coming down to identity and it’s coming down to getting your arms around your data.

I think those are the two really fundamental things and then building off of that with, as new stuff comes out, identity management data.

Russ Jones: Yeah, we identified that as one of our top 10 things to watch in 2024, is tons of technologies in place now to really see the industry start to shift on identity and authentication.

Yvette Bohanan: So before we wrap up here, one more question for you. In your role, you’re always talking to people about payments and risk management across the industry, across this huge merchant base all over the world in different regions. I don’t know who has the most frequent flyer miles, you or Chris, but that would be interesting.

So what are industry professionals and the merchants who you speak with all the time working on, and what’s keeping them up at night?

Julie Fergerson: Well, from my perspective, I always ask them, hey, what’s keeping you up at night and what’s your top priority? And I will say that, the regulatory pressures and all of the card network changes have really got the merchants trying to just keep up and understand it.

More happened last year than I think the last 10 years combined as far as regulatory stuff for a merchant, from a merchant’s perspective that directly impacts their roadmap. That said, pretty much all the merchants I know have projects underway that are all called pay by bank or open banking.

It may not necessarily be that true real time payment. It might be an ACH transaction that’s guaranteed, but getting some volume off the rails is really one of the things that merchants are pretty focused on for cost savings and for control, because there’s just so many changes, it’s hard to keep up and stay compliant.

Russ Jones: And by rails, you mean card system rails?

Julie Fergerson: Yes. Yes. The card system rails.

Russ Jones: Shifting over to ACH system rails.

Julie Fergerson: Yes.

Yvette Bohanan: Or, fast payment rails in some cases, right? Sure. Yeah. Chris, what are you hearing as you’re out there and about?

Chris Uriarte: Yeah, for sure. Well, I think regulation would truly hit on back to what Russ mentioned earlier when we talked about things we’re watching in 2024.

This was a big topic that we looked at. And we’ve got a number of these proposed regulatory frameworks or laws or whatever you want to call them that are either new this past year or being proposed that just didn’t exist at the beginning of 2023. It’s really incredible. And it’s not just US focused.

It’s around the world. The big topic that we continue to talk about is the CCCA, the Credit Card Competition Act here in the US., amongst other types of regulations from the CFPB and other legislators, so, we’re keeping an eye on CCCA to see whether that has an impact on whether merchants will vote to be able to route transactions for credit cards over alternative networks, not just Mastercard and Visa. And we know that a lot of merchants are very, very interested in this topic and keeping an eye on to see whether that’s actually going to pass and whether that’s going to move forward in Congress.

Yvette Bohanan: And how they’re going to implement it if it does.

Julie Fergerson: That’s the hot topic at the MRC, right? So we always say the MRC is the engine room where folks actually go and implement all this stuff that everybody’s talking about. And a bunch of our merchants went and read the credit card competition act. And it was like, ooh, that looks hard. And then the other concern that some of our members are bringing up is, okay, so if that money, that revenue stream goes away for the credit card networks, what other price is going to go up to cover that loss? So you mentioned whack a mole earlier, right? So, that’s the same with these revenues. We get one thing to go down and something else seems to go up. And so, if we go do a ton of work, are we really going to save money? Is the consumer really going to benefit?

Russ Jones: On our internal slack channels at Glenbrook, it’s the credit card unintended consequences act.

Yvette Bohanan: It is, I think the other one was the credit card consumer confusion act or something. Right?

Chris Uriarte: Right, exactly.

Yvette Bohanan: A lot of times regulation can be very, very well intentioned, but it’s all in the detail of the implementation that really determines. And the payments industry is resplendent with unintended consequences.

Russ Jones: Yeah, there’s no guarantee that interchange won’t go up as a result of the Credit Card Competition Act.

Yvette Bohanan:  Because there have been situations where things like that have happened before.

So, Julie, you spend a lot of time traveling all over the world, so catching up with you in a US time zone is exceptional and very much appreciated. So thank you so much for being with us. And Russ and Chris, you always bring fresh perspectives to the conversation and I always enjoy having you on the show. So thank you all for this conversation today.

Chris Uriarte: Thanks, Yvette. Thank you, Julie.

Russ Jones: Thank you, Julie.

Julie Fergerson: Thank you guys. It was awesome and fun to be here today.

Yvette Bohanan: I hope we get you back talking about other things someday in the future. I think it would be just a blast.

And for those of you listening, we hope this episode inspires you to think about what it means for you to take your payments career to the next level.

We need you in this industry and everyone in the industry needs each other. So take the challenge, get involved, get certified, and encourage your colleagues to do the same. Until next time, take care and keep up the good work. Bye for now.

If you enjoy Payments on Fire, someone else might too. So please feel free to share this podcast on your favorite social media outlet.

Payments on Fire is a production of Glenbrook Partners. Glenbrook is a leading global consulting and education firm to the payments industry. Learn more and connect with us by visiting our website at glenbrook. com. All opinions expressed on our podcast are those of our hosts and guests. While companies featured or mentioned on our show may be clients of Glenbrook, Glenbrook receives no compensation for podcasts.

No mention of any company or specific offering should be construed as an endorsement of that company’s products or services.

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