Debra Rossi is taking on the presidency of the Electronic Transactions Association at a time of profound change in the acquiring industry.
That change is reflected in the ranks of the organization Rossi now helms. The ETA is now welcoming of the large tech companies its members once considered outsiders or even competitors. Though this change may be unsettling to many ETA members, its all too familiar to Rossi.
Rossi, an executive vice president at Wells Fargo, grew up on both the issuing and acquiring side of the industry. She was influential in bringing electronic payments to the stores that clung hardest to cash, such as grocery stores and fast-food chains. And she participated in the development of an electronic payment system for eBay that set the stage for PayPals success.
Her vision for the ETA, particularly as payments shift increasingly to digital and mobile platforms, is to steer the group both its traditional and new constituencies toward a more collaborative future, one in which the very definition of an acquiring company changes. Things evolve in payments, and you cant stay in silos because we all depend on one another, she said. The fact that an executive of a bank is heading up ETA sends the message that were all in payments together.
In an interview, Rossi discussed her objectives as new head of the ETA and the challenges she anticipates as she takes the helm.
You majored in communications at Ohio University. Were you thinking then of a career in banking and payments?
I had a minor in business, but my goal was not to get into banking. One of my first jobs was working in real estate at Crocker National Bank, which was acquired by Wells Fargo in 1986. It just so happened that a position on the credit card issuing side became available at Wells Fargo, and somebody reached out to me. I thought it would be a great learning experience, and the rest is history.
That was a good time to get into the card business.
In the mid- to late-80s, credit card issuing was just taking off. BankAmericard was evolving into Visa, and there were a lot of opportunities back then because the credit card industry was just building out. Opportunity came along, and I took it.
So you were in issuing before you got into acquiring.
I was very fortunate in that I started on the issuing side of the business and in the early 90s I moved over to the acquiring side. There are probably not a lot of people who grew up on both sidesmerchant acquiring and card issuing.
You helped pioneer card acceptance at grocery stores and quick-service restaurants.
Yes. When I first got into the acquiring business, Wells Fargo was just a California and Western states bank. We were just building out our acquiring business and trying to expand into emerging markets. It came up that, wouldnt it be interesting if fast food took debit cards at the point of sale? It wasnt even credit cards. It was debit cards because a lot of that business is cash.
We worked with Carls Jr. way back then in 89, and they were the first fast-food chain to accept debit cards at the point of sale. We were the ones that helped them install the terminals at the point of sale. We had public announcements about the first fast-food chain to accept cards.
Today, every single fast food chain accepts debit and credit cards, but at the time it was new. Debit cards, we felt, were no different from cash except it was a more convenient way to make payment. So it just made sense.
Carls Jr. was in Southern California, willing to work with us and very interested in the future of payments.
What grocers were involved with the transition to cards?
Around that same time we were talking with a grocery store in California. It was Lucky Stores. Its parent company, American Stores, was taken over by Albertsons. They were the first grocery in the country to accept a debit card and credit card. That grocery store was looking for a more efficient way to handle cash, which is through a debit card. They were also asking how they could expand service to their customers so that anyone could pay any way they wanted. And the credit card was born as payment for the first time at a grocery chain.
So, it was all built around convenience. Back then, there was some pushback. People said, Wait a minute. Youre not going to put food on a credit card? That wasnt the premise. The goal was how do we create convenience for consumers at the point of sale for merchant segments like grocery, fast food or petroleum?
We were very much a pioneer in creating new payments.
Were talking about the late 80s. How much did the public use debit cards then?
There was a company called Interlink, and it was owned by five big banks in California and ArizonaSecurity Pacific Bank, First Interstate Bancorp, Wells Fargo, Bank of America and Crocker Bank. Those five banks said, Today, a debit card is used to take money out of an ATM. What are other ways we could expand the use of a debit card if this is truly an alternative to cash?
And those five banks got together and created Interlink. The Interlink mark was put on the back of the debit card. That is when we introduced it to be more than just to get cash out of an ATM. Now you could use it at the point of sale. Eventually, the five banks sold that company to Visa.
People didnt hear about it a lot because it was going on in the Western United States at that time. When we sold it to Visa, the whole premise was that it could work across the country. Today, the Interlink mark is still on the back of Visa debit cards in the United States and beyond. It is the debit card mark of Visa.
You also played a role in the early acceptance of cards on the Internet.
Wells Fargo has always looked at innovation for how we can expand payment beyond traditional payments.
When the Internet was just picking up we asked, How can debit and credit be used on the Internet for payment purposes so people can buy, shop and pay with a debit or credit card? In the early 90s, we ran the first secure credit card transaction on the Internet with a small Internet startup company called Virtual Vineyards, which morphed into Wine.com.
We then worked with a startup that had an interesting idea. They wanted to sell Beanie Babies and other things in auctions on the Internet. In the early 90s when an auction was completed on the Internet they paid by sending checks to one another. The CEO of that company came to Wells Fargo and asked if there was a way to create payments on the Internet. That was a startup in the early 90s called eBay. We created a payment company called Billpoint that was going to become the payment engine for eBay, and that eventually [set the stage for] PayPal.
So thats how we got our start on Internet. We were focused on how commerce could be expanded to do shopping online and have a convenient way to pay whether it be debit card or credit card because cash and checks were not do going to do it for the Internet.
How did you become involved with the Electronic Transactions Association?
I first started in about 2000 by sitting on their industry relations committee, and then I headed up that committee. It was dealing with the industry and all of the players, especially the card networks. I was also involved on the government relations committee, and then was eventually invited to sit on the board of ETA.
The ETA started as an ISO trade group, but now its more inclusive. Do you feel its unusual that someone from the banking side of the business is ascending to the ETA presidency?
No, I really dont. As much as we all want to stay within our silos, with ISOs in theirs and banks in theirs, we all work together. We all depend upon one another. ISOs couldnt have existed without banks to sponsor them and help them with clearing and acquiring. Its kind of like Bank of America with the BankAmericard morphing into the Visa card. Things evolve in payments, and you cant stay in silos because we all depend on one another to collaborate, to work together on innovation. Thereve been heads of ISOs that have been president of ETA. There have been executives of processors. And the fact that an executive of a bank is heading up ETA sends the message that were all in payments together and we collaborate to succeed in this space.
Were seeing some changes in the ETA with big tech companies joining the organization. How will that affect ISOs?
Youre right. There are a lot of big tech companies coming into the ETA. A lot of these companies are forming partnerships with ISOs. Some of the ISOs are becoming technology companies themselves. All of them are focused on promoting safety, security, reliability, usability. The tech companies are wonderful collaborators. They come into this space with some unique offerings and service and technology, and theyre becoming wonderful partners for ISOs, banks, processors. I think theyre playing a vital role in the ETA as far as the ISOs are concerned.
Do new entrants to the industry realize ISOs have a role to play in acquiring?
I think they do. They understand that there is no one entity that is key to payments. Its not banks. Its not the Apples of the world. Its not technology companies. Were all working together. ISOs are very much key to the distribution of the services that are offered in payments. They play a critical role, and I do think the tech companies are aware of it. Thats why a lot of them are partnering with ISOs.
ETA membership has grown quickly in the last year. Will that continue? What else do you see ahead for the association?
The industry is growing, and the ETA is growing along with it. It started out to be an ISO organization, and it now has banks and processors and technology companies involved. In 2015, were finally going to move from the discussion phase of mobile payments to real implementation, thanks to ETA member companies like Apple, Samsung, PayPal, AT&T. These are the companies that are going to help ETA with the changes that we see ahead. And these are the people that are looking for distribution or looking for partners and are very focused on ISOs and banks and processors.
Will we see changes in data security this year?
With the ETA, youre going to see more focus on safety and security. Youre going to see that people outside the industry are looking at security around payments. The ETA is a wonderful entity to bring forth what were doing with EMV, tokenization and so forth. There is a lot of change, but it is really exciting.
How can the ETA promote security? I guess education is part of it.
Definitely education. Its also government advocacy. The ETA is working very hard in Washington, D.C., to educate regulators. What is EMV? What is tokenization? What has the industry done or not done, and where are they moving to really focus on safety and security? They play a very key role, a very specific role in educating key legislators around this. Im not sure anyone else can play that role in Washington.
Can the ETAs Certified Payments Professional credential promote data security?
The second way the ETA can help with safety and security is the CCP. Its a certification program that sets the standard for professional performance in the payments industry. What we like to say is that its the symbol of excellence. Almost a thousand individuals earned the credential in this past year. That program actually focuses not only on educating individuals about payments but educating them on the safety and security around payments as well as the ethics around payments. Big companies like Wells Fargo and First Data have training departments for their employees, but what about the ISOs? They dont have large training organizations, and the look to the ETA. The CPP is their training department, and they are really embracing it.
Are merchants using the CPP as a way to screen ISOs? How can the ETA tell merchants about the credential?
The ETA is getting the word out there about the CPP and making sure people are aware it is available. Theyre partnering with groups such as the National Retail Federation to let them know in newsletters and magazines that this program is available.
How is this important to merchants? Merchants want to know they are dealing with experts in the payments industry people who know about the risk, people who know about the efficiency and people who know in general about payments. Merchants would embrace this.
Its another value of doing business with the ETA. Its another value of being a member of the ETA.
The ETAs annual conference and trade shows been changing. Its now called Transact, and theres an emphasis on innovation, especially on innovative startups. What other changes do you have in store for us?
The 2014 show was the largest event in ETA history. There were a record 220 exhibitors. Attendance was the largest it ever had been. The focus of the ETA is not to be the biggest conference in the world like some others but for the quality it brings to its members.
So in 2015, the show is in San Francisco, very close to Silicon Valley, and its going to have a track with an emphasis on startups. There are a lot of startups coming to the show, and a lot of startups are members of the ETA.
Right now, payments is probably the most exciting place in technology. Investment in payments is picking up faster than ever. So theres going to be a three-day track that really is focused on letting investors know whats out there, whats the thinking around payments, whats new in startups in payments. So, theyre going to focus on that.
At this 2015 conference youre also going to see something called Payments Pitch Off, where some of the most innovative companies in payments are going to vie for the ePay Innovation Award. So, theres a lot of emphasis around that.
In the exhibits, theres going to be a section for innovative startups at the conference.
Also at this conference youre going to have keynote speakers who are very interesting: the president of Visa, Ryan McInerney; the CEO of MCX, [Dekkers Davidson], the president of Alipay USA, [Jinming Li]. Talk about a wide range of payments perspectives. Thats going to generate a lot of interest. Its a very exciting space right now.
Do you foresee more changes in the ETA itself?
As the industry changes, so does the ETA. If it remained an ISO organization, there would be no growth. But it expanded the tent. Payments is about ISOs and banks and processors and technology companies. Youre going to continue to see change in the ETA. Were going to have to see where payments are taking us.
For one thing, mobile is going to change the way we do business today, not only for our consumers, but for merchants, the processors, banks. How are we going to do it in a secure fashion that has got to change. EMV and tokenization have existed internationally for a very long time. The U.S. has to really take a stance in catching up, focusing in these areas.
I think we can bring the value proposition when it comes to security to various entities in the payments value chain.
The ETA is involved with the Global Acquiring Conference, which is scheduled for May in London. Do you see other international opportunities for the association?
ETA started out as a very U.S.-based business. Its now expanded to where many members are now international. It seems to make sense to me to extend the reach of ETA internationally. The conference in London is a natural extension of what the ETA is doing in the U.S.
Shifting gears, how are women faring in payments?
I would say OK, probably not great. It could be better. When I started in this business, it was exclusively men. I sat on many boards for MasterCard and Visa, and I was the only woman on those boards. Im happy to say, though, we have diversity on the ETA board. There are women representing large companies. We have a ways to go, but were starting to move into this space where women play a serious, vital role. Theyve got to be willing to take the risk. They have to have the courage and commitment. This is a very complicated, male-dominated industry. But Im thrilled that its starting to change. The sails are starting to shift.
Im very pleased to see we have representation from women from companies large, medium and small. We do have women sitting on the board as well as on all of the committees. So I think we are seeing a shift in this industry. The opportunity is there for them to really succeed and help change the industry.
We talked about mobile payments taking off this year. What else do you see happening?
What we see ahead, especially with mobile and Apple Pay being introduced, is payments is going to continue to grow. Were going to see more innovation. Security and safety are going to be key for the future, ensuring the payments that we are supporting and managing and processing all have the security and safety around making consumers feel This is safe when Im shopping and I should never have to care where I shop, how I shop. Im going to have a good experience.
What advice would you have for ISOs and tech startups?
Make sure you understand the payments business. The industry is very complicated. No. 2, make sure that anything you are doing in this space has the appropriate safety and security. That has to be paramount. Then there has to be a level of ethics in the value proposition, whether youre selling to merchants or you are distributing to consumers. If you have those as a sound foundation, the innovation will be great and the rest will come.
We deal with a lot of startups and we make sure that they have all those controls in place. A misstep in those areas, and your business is over. It can have devastating impact. ISO
This interview has been edited for length and clarity.