Calls have been coming in about new MasterCard and Discover processing requirements. Some outlandish, some dead on.

MasterCard and Discover are modifying their rules concerning the processing of debit, prepaid and gift cards. MasterCard’s rule changes go into effect May 1, 2010, and Discover’s rule changes go into effect April 16, 2010. However, MANY ECOMMERCE HOSTS, INCLUDING VOLUSION, AND GATEWAYS, INCLUDING AUTHORIZE.NET,  have gotten an extension.

” MasterCard and Discover have worked together to extend these dates for all merchants using (INSERT VENDOR NAME HERE). Our merchants will now have until June 30, 2011, to implement support for the requirements within their systems.

What are the requirements?
MasterCard and Discover are requiring that all merchants support the following:

- Balance response transactions — For prepaid and gift cards, once the card has been used, the remaining account balance will be transmitted along with the authorization response. The remaining balance must be printed on the customer receipt, displayed on the Web page or point-of-sale terminal, or both.

- Partial authorization transactions — When a customer’s transaction amount exceeds the balance available on their debit, prepaid or gift card, instead of declining the transaction, a partial authorization for the amount available to the customer will be returned. This will allow the customer to pay for the remaining amount with another form of payment. This is called a split-tender transaction.

- Authorization reversals — An authorization reversal is a real-time transaction initiated when the customer decides that they do not want to proceed with the transaction, or if the merchant cannot complete the transaction for any reason. Authorization reversals free up the customer’s available balance on their debit, prepaid or gift card.

Ecommerce companies and gateways are dependent upon processors to exchange the data needed to support the above requirements. Shopping carts need to be able to accept and interact with updated gateway parameters. Gateways need to interact with various processors,  passing data to the gateway, receiving a response, and passing that back through to the shopping cart/ consumer. This is a huge undertaking to ensure all the data passes back and forth correctly.

Excerpt of email received today:

What steps is Authorize.Net taking to support these requirements?
Authorize.Net will be updating our systems over the coming months to support the requirements, but will be dependent on each processor’s readiness. For a table of when we anticipate we will support the requirements with each processor, please visit http://www.authorize.net/support/pafaqs/#when.

What do I need to do to support the requirements?
The steps that you will need to take to support the requirements depend on how you connect to the payment gateway. For example, if you connect using a shopping cart, point-of-sale device, or other solution, you will need to contact your solution provider to confirm that they will be supporting the requirements. If you connect using a direct integration, you should contact your Web developer for assistance. Please direct your Web developer to http://www.authorize.net/support/pafaqs/#do for information on the changes they will need to make.

Do I have to support the requirements?
MasterCard and Discover are requiring all merchants to support the requirements with the exception of merchants that exclusively process transactions via batch uploads, mail order/telephone order (MOTO), or recurring payment transactions. Your Merchant Service Provider (MSP) is ultimately responsible for determining if the requirements apply to your business, so please contact them for assistance in determining if your company is exempt.

Once again, these requirements will not be enforced for Authorize.Net merchants until June 30, 2011. However, we wanted to bring them to your attention now so that you have plenty of time to plan for their implementation.

For more information on the requirements, including how they affect our value-adding services, please visit our FAQ page at http://www.authorize.net/support/pafaqs/.

MasterCard Worldwide Waives Fees on Donations to Haitian Aid Efforts

PURCHASE, N.Y., January 14, 2010 - MasterCard Worldwide announced that it will waive interchange fees on Haitian relief donations that are made using U.S. issued MasterCard cards to the following organizations: The American Red Cross, AmeriCares, UNICEF, Save the Children, Doctors Without Borders, Partners in Health, United Way, World Vision and CARE USA.

MasterCard’s Canadian operation also announced it will waive interchange fees on relief donations that are made using Canadian issued MasterCard cards to the following organizations: CanadaHelps, Canadian Red Cross, Doctors Without Borders/ Médecins Sans Frontières, Oxfam/Humanitarian Coalition, Save the Children, United Way, The Salvation Army, UNICEF Canada, Plan Canada and World Vision.

MasterCard’s Latin America & Caribbean will donate revenues from fees collected on donations to Haitian relief efforts made using Latin America & Caribbean issued MasterCard cards to the Red Cross and United Way.

MasterCard’s support also includes a $250,000 corporate donation to the American Red Cross and is double-matching employee contributions to the Haitian disaster relief funds of those charities listed above. In addition to waiving fees, MasterCard will also donate revenues generated by charitable contributions made to these organizations through February 28, 2010.

About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. Follow us on Twitter: @mastercardnews.
back to top

The FALL 2009 ASSOCIATION INTERCHANGE COMPLIANCE GUIDE included over 100 changes, making it one of the larger updates in recent history. Merchants at the same time were switching suppliers with fever, however the new updates won’t really be felt until the November or December merchant statements are reviewed.

The fall rush to change suppliers is most likely a result of the multiple new Visa fees and the MasterCard brand usage fee added this year, which went into effect April-July. Requirements to qualify for specific interchange rates for International interchange programs are outlined. Many larger merchants will see rates approaching or over 3% when all fees are added, for foreign card transactions. For example, MasterCard
COMMERCIAL DATA RATE II = 2.25 %( US Location w/Global Corporate Acquirer Program Support Fee .55%) . (Non US Issued Cards Only.)

Additionally, as previously reported, new requirements are in effect to qualify for certain B2B credit card transactions. B2B Merchants can expect to see effective rates rising above 3% in the card not present environment.

WORLD ELITE RESTAURANT = 2.20% + $.10
HIGH VALUE RESTAURANT = 2.20% + $.10
ELECTRONIC PAYMENT ACCOUNT DATA RATE I = 2.65% + $.10
ELECTRONIC PAYMENT ACCCOUNT DATA RATE II = 2.40% + $.10

The changes this fall continue to expand the need for merchants to work with processors who provide the following:
- Transparent reporting so the merchant can clearly identify interchange rates qualified for.
- Interchange management- interchange continues to grow more complicated and merchants who best control costs will have a payment processor who helps them with interchange management.
- Flexible Technology to manage interchange- this is probably the single biggest growth area in the payment processing industry as merchants need to get away from static systems and move to smart technology with least cost routing solution.