Visa & MasterCard both announced changes for October 2008, with B2B companies again likely to feel the biggest negative impact.

Interchange Rate Changes

Corporate Card Level II Data Rate + 0.05%
Business Card Level II Data Rate + 0.05%
Purchasing Card Level II Data Rate + 0.05%
Commercial Card Retail - Corporate - 0.10%
Commercial Card Retail - Purchasing + 0.10%
Purchasing Card - Card Not Present + 0.15%
Purchasing Card Electronic +0.20%
Corporate Card Electronic + 0.05%
Corporate Card Standard + 0.25%

See more about Fall 2008 interchange updates here.

Visa and MasterCard recently announced revised interchange adjustments for Fall 2008. Effective October 3, 2008, all qualifying merchants will be subject to the following revisions:
Visa Revisions Effective October 3. 2008
Visa Fuel Merchants Rate Changes - Effective October 3, Visa will institute one consolidated interchange rate affecting all consumer credit products for Merchant Clearing Codes (MCC) 5541 and 5542. This applies to all consumer credit including Rewards, Signature and Signature Preferred.

Visa Automated Fuel Dispenser Partial Authorization (AFD) Requirements - AFD merchant software providers must now support the ability to receive partial authorization approval amounts, in authorization messages, for all Visa transactions. Merchants should be aware that authorization requests failing to meet this criteria will be assessed an additional fee of $0.01 per transaction, which will be passed through to the merchant.

Visa Commercial Rate Modifications - Effective October 3, Visa will introduce new rate changes resulting in potential impact to all merchant segments. Relevant updates include an increase to Commercial Product Level II and Standard transactions, modifications to Commercial Card Retail and Card-Not-Present (CNP) transactions and an increase to Commercial Electronic transactions. There are no changes to Commercial Product Level III transactions to announce at this time.

New Visa Debt Repayment Fee Program - Visa is introducing a new interchange fee and rate program for domestic debt repayment transactions applicable only to collectible consumer debt on auto loans, credit card payments, mortgage payments and student loans. The qualifying rate will be 0.35% + $0.50 and merchant registration is required. Eligible merchants must be prepared to submit the bill payment indicator, bill payment processing code and the existing debt indicator. Acquirers must register eligible merchants with Visa.

New Visa CPS/Debit Tax Payment Fee - Visa will implement a new interchange rate program for Visa consumer debit transactions submitted by acquirers from a participating tax authority or third-party service provider accepting payments on behalf of the tax authority. Merchant registration is required and eligibility standards do apply.

Visa GSA Government to Government (G2G) Modifications - Visa is introducing a new G2G program and revised interchange rates for government merchants accepting government cards. Qualified Merchants will now be eligible for the interchange rate of 1.65% + $0.10. Merchant registration is required to participate in this program.

Visa GSA Purchasing Card/Large Ticket Modifications - Visa will now allow GSA Purchasing Card and GSA Fleet Card transactions accepted at non Travel and Entertainment (T&E) merchant locations to be eligible for Level Ml interchange. Level II and Level III Commercial Data will continue to be required to qualify for this category.

MasterCard Revisions Effective October 3. 2008
MasterCard Revised Standards for Transaction Presentment Time - Effective October 3, MasterCard is reducing the current first presentment time frame of 30 days to a maximum of seven calendar days from the original transaction date.
MasterCard Revised Standards for Quick Payment Service (QPS) Program - MasterCard will require that all transactions, including QPS, be authorized for optimum interchange qualification in order to meet chargeback requirements.

MasterCard Fleet Merchant Data Quality Modifications - MasterCard will implement additional industry interchange data requirements for fuel transactions supporting fuel addendum detail. As a result, relevant data will be subject to Fleet Data Quality Edits and must be present in transactions to avoid downgrades. This pertains to valid values for fleet transactions including Motor Fuel Product Code, Motor Fuel Unit Price, Motor Fuel Unit of Measure, Motor Fuel Quantity, Motor Fuel Sale Amount, and Driver Number/ID Number.

Specific new interchanges rates affecting B2B.

Visa interchange rates and MasterCard interchange rates provide additional information on their Web sites.

New TowerGroup Research Examines Obstacles to Success of Alternate Payment
Mechanism

NEEDHAM, Mass., Sept. 11 /PRNewswire/ — In the mid-1990s, the electronic funds transfer (EFT) networks debuted PINless debit, or PINless bill payment, as a new, low-risk way for billers to collect payments from consumers. New research from TowerGroup estimates that PINless debit bill payment volume in 2007 will be at least 40 percent higher than in 2006. However, various obstacles to its adoption will cause PINless debit to remain a small percentage of overall bill payments (0.45 percent).

PINless debit allows consumers to pay bills through a remote channel by entering their debit card number without the personal identification number (PIN). Since its introduction, transaction volume has grown steadily as billers and their customers explore this alternative. However, adoption of PINless debit continues to face many challenges, including: inconsistency in industries eligible for participation; functionality; and card eligibility.

PINless debit offers benefits to billers that “split the difference” between credit cards and ACH debits. PINless debit, like credit cards, provides guaranteed funds. ACH does not. However, PINless debit does not have the higher fee structure associated with credit cards. PINless debit can be used to pay bills for which credit cards as a payment method are simply precluded, such as credit card invoices themselves. It is also an
additional method to increase overall adoption of electronic payments, a common goal for billers and suppliers in the bill payment value chain.

The new research report, titled “PINless Debit: Finally Taking Off or Headed for a Crash Landing,” by Jennifer Roth, a senior analyst in the Global Payments practice at TowerGroup, identifies the challenges related to PINless debit bill payment, the methods for overcoming these obstacles, and the durability of PINless debit as an alternate payment method.

At TowerGroup, Roth’s research focuses on electronic bill and invoice presentment and payment, including the Internet environment and otherchannels in which it can be delivered. She also examines consumer funds transfer, remittance processing, and the domestic electronic funds transfer networks supporting payment processing infrastructures.

About TowerGroup: TowerGroup is the leading research and advisory services firm focused exclusively on the financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world’s leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America and Europe, TowerGroup serves a global client base.