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.