A fully functional credit card processing system requires the adoption of numerous standards at the local, national and international levels. The private, non-profit American National Standards Institute (ANSI) is one of the organizations that has created important financial standards. Here is more information on the American National Standards Institute.
Who sets industry standards?
Generally, the government has been tasked with establishing standards, guidelines and rules for all elements of society. Under capitalism, there is the belief that the private sector can develop certain norms more efficiently. Most government bureaucracies become trapped by too many rules and lack the expertise to properly assess technological innovations.
Since 1918, the Washington-based ANSI has attempted to create a “voluntary consensus” on various standards for products, services and processes. Originally, the organization concentrated on the United States, but it has gradually expanded its reach to ensure that American standards are coordinated with international standards.
What fields is ANSI involved in?
Over the years, ANSI has developed from its engineering origins. Institutes of electrical, mechanical and civil engineering have branched off from ANSI to create their own spin-offs. Since then, ANSI has become more involved in the merchant account and credit card processing. The contours of the modern merchant account has been established by coordination between government, scientific and professional organizations.
Why is ANSI able to find common ground?
There are more than 3 million professionals and 100,000 companies that are represented by ANSI. A private, non-profit organization is able to bridge the gap between the private and public sectors. It does not need to force individuals to accept a ready-made template. It can sponsor discussions for the development of new standards as deemed necessary by its members.
An open process allows for individuals to voice their concerns before the standard is finalized. Disagreements can be ironed out. Flaws can be fixed. The result is a better standard that has already been tacitly endorsed by the stakeholders because the stakeholders had a say in its development. In fact, most government law bodies allow for the public to offer their opinions during the public discussion phase.
ANSI accredits the developing organizations that are responsible for setting the standards. The ANSI seal of approval demonstrates that the standard is well-received by educational, scientific and professional communities. The broad-based, consensus-centered, discussion process ensures that new standards are accepted by the overall community.