The Federal Reserve Banks of Boston and Atlanta through their Payment Strategies and Retail Payments Risk Forum Groups have released a paper based on several meetings of the Mobile Payments Industry Workgroup over the last two years. This paper updates the original version issued in 2011 and reflects on the evolution of the mobile retail payments industry over the last two years, which has witnessed considerable changes including collaborative efforts across a diverse set of industry stakeholders despite a market still characterized by considerable fragmentation, increased channel and technology convergence, participation by new non-bank entrants, and continuous technological innovation and experimentation. The paper concludes that while the market is still nascent, progress is being made towards achieving benefits within this ecosystem such as improved security and fraud reduction, cost efficiencies, value-added services, revenue and monetization opportunities, and data privacy. As a result of changes in the mobile payments landscape, the MPIW has updated its original strategic principles and has carved out a long-term vision that embraces technological disruption and is committed to interoperability and ubiquity but realizes the need for a concerted effort to develop industry guidance and standards to ensure a secure and cost-efficient ecosystem.

U.S. Mobile Payments Landscape – Two Years Later

(pdf)

Spend management has it’s benefits, but do the consultants really know what’s the best credit card processing solution for your business? Spend management consultants often mistakenly focus on the very same financial issue as merchants: the merchant discount. The biggest savings are achieved with interchange management.

3 questions every business to business company should ask before changing merchant accounts or credit card processing technology:

1. How will your solution help me manage interchange qualification? (What specifically will it do to ensure that transactions achieve qualified instead of non-qualified interchange rates? Does it rely on employee training or does it handle it automatically?)
2. How often does the company roll out new innovations? (The payments industry is changing fast, will they be able to keep up? Is this company a market leader?)
3. How will your technology impact my PCI Compliance burden? (Payment Card Industry Data Security Standards or PCI DSS)

I’ve talked to a bunch of spend management experts over the years. Rarely do they have the expertise to guide merchants to the best solutions. They can help you reduce costs, but don’t leave money on the table by only solving part of the problem.

About the author: Christine specializes in providing merchants with innovative technology to manage the cost of accepting credit cards, without changing merchant accounts.  With a primary focus on “card not present” payment processing solutions for mid-size companies, including manufacturers and wholesale distributors,  merchants improve PCI Compliance and streamline the payment experience for both their company and their customers. It’s fast, easy to use, and requires no capital investment to implement. For sales call Christine at 954-942-0483 or click here for more information.

Below are highlights of a few credit card processing 2013 rules changes applicable to many 3D merchant blog readers. Please note, the information contained herein is limited and does not contain all the applicable details. Refer to the card brand rules for specific details or contact your merchant services provider.

CARDS ISSUED OUTSIDE US: Effective April 19, 2013, American Express increases Fee from 0% to 0.40% for Prepaid Cards. Effective April 1, 2013, MasterCard increased the Acquirer Program Support Fee from 0.55% to a new amount of 0.85%.
DISPUTES: Effective April 20, 2013, Visa will update International Operating Regulations with modified and new compelling evidence rules for the dispute resolution process.
Visa New Representment Right for Compelling Evidence
Related dispute reason codes: 30 – Services Not Provided or Merchandise Not Received; 53 – Not as Described or Defective Merchandise; 81 – Fraud Card Present; 83 – Fraud Card Not Present.
EXAMPLES:

• For a Mail/Phone Order transaction, a signed order form.
• For a card-not-present transaction, evidence that the transaction uses data, such as IP address, email address, physical address, and telephone number, that had been used in a previous, undisputed transaction. Evidence that the transaction was completed by a member of the cardholder’s household.
• For a transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the cardholder was an employee of the company at that address (e.g. confirmation that the cardholder was listed in the company directory or had an email address with the company’s domain name). A signature is not required as evidence of delivery.
• For a card-not-present transaction in which the merchandise is picked up at the merchant location, any of the following:Cardholder signature on the pick-up form. Copy of identification presented by the cardholder. Details of identification presented by the cardholder.

Effective October 19, 2013 Change to MasterCard return policy for reason code 60 – Credit Not Processed. If a merchant doesn’t accept buyer’s remorse returns and cancellations, special terms must be disclosed them at the time of the sale. Cardholders must be informed of the Refund Policy prior to completion of the sale at the point of interaction. Failure to disclose will result in the merchant requirement to accept the goods for return and issue a credit to the cardholders account.
Note: Special Terms would include but not be limited to; restocking fees or in-store credits.

Please refer to official documents for further information. Here’s a list of links to card brands.

Effective April 20, 2013, Visa will be updating the International Operating Regulations to allow additional as well as clarify the types of compelling evidence that can be used during the dispute resolution process. Compelling evidence can be provided during the representment stage to allow the merchant the opportunity to show that the cardholder participated in the transaction. Compelling evidence does not mandate that the cardholder participated in, received goods or services, or benefited from the transaction.

Allowable Compelling Evidence examples:

Evidence, such as photographs or e-mails, to prove a link between the person receiving the merchandise and the cardholder, or to prove that the cardholder disputing the transaction is in possession of the merchandise.

For a card-not-present transaction in which the merchandise is delivered, documentation (evidence of delivery and time delivered) that the item was delivered to the same physical address for which the merchant received an AVS match of “Y” or “M.” A signature is not required as evidence of delivery.

For a transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the cardholder was an employee of the company at that address (e.g. confirmation that the cardholder was listed in the company directory or had an email address with the company’s domain name). A signature is not required as evidence of delivery.

For a Mail/Phone Order transaction, a signed order form.

Please refer to the Visa International Operating Regulations after April 19, 2013 for specific details.

Merchants Have New Representment Right for Multiple Fraud-Related Chargebacks

In 2011, MasterCard implemented the Fraud Notification Service (FNS) as a means of ensuring that chargebacks are properly submitted by the issuer.
Accounts that are deemed fraudulent must either be closed by the issuer or the chargeback rights must be relinquished for those accounts. This service also helps determine if a chargeback representment option is possible.

Effective April 19, 2013, MasterCard will expand their rules regarding excessive fraud chargebacks on a single MasterCard card account number and expiration date combination.
Prior to this change, if fraud-related chargebacks occurred on any one MasterCard card account (used at any merchant), the chargebacks could only be represented if the transaction occurred prior to the date of the second fraud-related chargeback (the FNS date). With this modification, if there are over 35 fraud-related chargebacks on any one MasterCard cardholder account (used at any merchant), merchants will have the right to represent the transaction to the issuer. This is a positive change to protect merchants from fraud.

Now 2013, some merchants are experiencing issues related to the revised MasterCard and Discover 2010 Prepaid and Debit Card Requirements, particularly partial auth reversals. One reason is that some transactions received a partial approval. A partial approval occurs when a Gift Card is used (Visa/MC/AMEX prepaid cards) that have a lower balance that the requested authorization amount;  the processor approves the transaction for the amount that is left on the card. The merchant then must collect the balance with an alternative payment source such as cash or another card.

The 3 critical points of the rules change (from MasterCard):

• Partial Approvals—Merchants can systemically conduct split-tender purchases by allowing debit card issuers (including prepaid) to systemically approve a portion of the original transaction amount in the authorization request when the transaction amount exceeds the funds available on the card. The merchant can then systemically initiate split-tender processing and obtain the remainder of the purchase amount in another form of payment.
• Balance Response—Prepaid issuers can transmit account balance information in an authorization response, cardholders will attempt fewer purchases that exceed their available balances, leading to fewer declines at the POS.
• Authorization Reversal—Authorization reversals will free up debit cardholders’ open to buy amounts by reducing issuer holds on available balances when transactions were not completed, therefore reducing the declines at the POS and the amount of cardholder complaints that are unpleasant for all parties involved.

At the time the rules were created, technology within various points of the payment processing ecosystem could not support the new requirement. Payment gateway and processor issues have largely been resolved at this point, but partial authorizations may still be troublesome in certain environments. For example, an ecommerce site or POS software solution may not have the logic to accept an alternate payment source. If you have an issue, the simplest immediate solution is to contact your credit cart processor and ask them to turn off partial authorizations on your merchant account.  That’s the quick fix, however, if the rules apply to your business, you may need to update your payment technology to comply. Refer to page 299 in the MasterCard Rules, updated December 2012, for more information on Full and Partial Approvals and Account Balance Responses.

About Christine Speedy, blog author. Christine is an authorized sales agent for CenPOS, a cloud payment processing suite of solutions that creates numerous efficiencies for merchants. The CenPOS point of sale, mobile app, and other solutions support partial authorizations and authorization reversals.  CenPOS Global Sales: Christine Speedy (954) 942-0483.

In November 2012, the United States District Court for the Eastern District of New York preliminarily approved a proposed settlement agreement in the In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. As part of the merchant class action settlement, beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a checkout fee on consumers when they use a credit card.

Key elements:

• Merchants who choose to surcharge must notify MasterCard,  notify Visa and notify their acquirer 30 days prior to beginning to surcharge.
• Brand Surcharges (Visa, MasterCard) cannot exceed the lesser of the maximum amount of 4% of the underlying transaction, or the average effective merchant discount rate**.
• Product Surcharges ( Rewards, Purchasing etc)  must not be more than the merchant’s cost to accept the particular credit product, minus the Durbin Amendment’s cap on debit interchange fees.
• Must be able to apply the same surcharge rules to competitive networks, where allowed by law
• DETAILS ARE IMPORTANT, including receipt requirements- Please read all the official rules, see links below.
• Debit transactions are protected under the Durbin Amendment of the Dodd-Frank Act, 2011 and may not be surcharged.

States With No Surcharge Laws*
California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas

*Source: Visa.com 1/13/2013

** We assume that they mean the average effective credit card processing rate, not the average effective merchant discount rate, which is only the portion of fee over and above actual interchange fees paid.

Visa surcharge rules

MasterCard Surcharge Rules

Discover was not part of the litigation, and lifted it’s no surcharge rule in 2012. With all the rules above, if a merchant chooses to surcharge customers, they will need technology to ensure all the rules are complied with. CenPOS is a rules based payment processing network, including payment gateway,  that works with all major credit card processors. If interested in surcharging, please contact Christine Speedy.

About CenPOS “Creating efficiencies through payment innovation”
Founded in 2009, Miami-based CenPOS is a SaaS payment technology provider. CenPOS is an intelligent payment processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems. Global Sales: Christine Speedy (954) 942-0483.

Miami, FL (PRWEB) October 16, 2012  CenPOS announced today that it is now certified with United TranzActions, LLC, also known as UTA, to provide check and payment processing services through CenPOS. The certification will support Remote Deposit Capture (Check21), Check Guarantee, ACH, and Check Conversion through UTA, with support for both scanned and manually entered checks. Merchants utilizing the CenPOS payment-processing platform will be able to take advantage of UTA’s payment processing and check guarantee services through CenPOS’s interface. CenPOS and UTA also announced that the second certification is underway to support additional services e.g. C.O.D and Hold Check. The new certification process is expected to be completed within 90 days.

CenPOS already has certifications with a host of financial networks across the globe thus enabling their clients to take advantage of their least cost routing capabilities and lower interchange costs. “This certification is part of our continued commitment to being a single payment solution for our clients,” said Jorge Fernandez, President and CEO, CenPOS. “Being able to accept credit, debit, and checks securely and efficiently all through the same platform for our customers is a significant boost for operational efficiency,” added Fernandez

As one of the leading check processing and guarantee companies in country, United Tranzactions has been bringing unique, customized payment processing solutions to their national merchant base since 1991. “We are always looking for new and innovative programs to benefit our customers and we believe this integration with CenPOS will bring great value and efficiencies to both UTA and CenPOS merchants,” said Alex Borroto, EVP and Chief Operating Officer, UTA. “There are many synergies between UTA and CenPOS. Our high customer service standards and the value we place on strong merchant relationships are at the top of the list, we are very excited about the alliance between our two companies,” stated Mr. Borroto.

About CenPOS
“Creating efficiencies through payment innovation”
Miami-based CenPOS is a payment technology provider. CenPOS is committed to providing its customers and partners with innovative solutions for today’s rapidly evolving consumer payment choices.

CenPOS is an intelligent payment processing network that streamlines the payment experience for businesses and consumers by using state-of-the-art technology to replace inefficient, outdated payment systems. The network reflects the core values that drive the experienced and innovative CenPOS team: Simplicity, Scalability, Security and a holistic approach to payment processing strategies.

CenPOS provides solutions to a range of organizations including but not limited to retail, card not present merchants, automotive dealers, professional services and academic institutions; special programs are also available for non-profits. Call us: (305) 630-7960 , or toll free: (877) 630-7960 .

LinkedIn: http://www.linkedin.com/company/820255
Twitter: http://twitter.com/cenpos @CenPOS

About United TranzActions
UTA is the result of a merger of National Check Trust (founded in 1991) and American Check Management (founded in 1996). UTA is now a leading payment solution provider and the 3rd largest check guarantee company in the industry. UTA is able to offer its clients a suite of programs guaranteed to maximize revenue and minimize risk, while delivering the highest level of customer support. UTA provides a wide variety of pre-built or customized gateway payment solutions that saves its customers time and money. From paper check processing, internet and fully integrated payment processing, each of our products is designed to deliver value and peace of mind with the industry’s most secure payment solutions. Specific products include Check Guarantee Services, Remote Deposit Capture with Guarantee, ACH Processing with Guarantee, Electronic Bill Presentment and Payment, Credit Card Processing, Virtual Lockbox, and Customized Online Bill Pay. For information about this press release or other offerings please call us at 954-499-3696