Recurly Visa Stored Credential Framework blog omission

A Recurly blog article “How Recurly is Supporting Visa’s Stored Credential Framework” has some misinformation. The cited dates are incorrect and merchant responsibilities are understated. Why is that important? Most payment gateways and technology solution providers are not keeping up with the rapid pace of rules and compliance changes, impacting merchant profits and risk. Therefore, payment technology vendor selection, including payment gateway selection, is critical.

Recurly, like others in the cloud solutions space, is partially dependent on their partners to keep their clients in compliance with a myriad of rules. When should technology partners alert their integrated solutions partners about industry changes affecting their mutual clients? Solutions providers and merchants are getting inaccurate advice, or none at all, from trusted advisors, technology providers, and consultants of all sizes and sources.

As soon as Visa released the news in their Merchant Business News Digest in August 2017, Recurly began reaching out to our gateway partners to get ahead of the work required to fulfill the mandates.” The real dates were much earlier than cited. Visa typically announces at least one year in advance of due dates for any significant change, which this update is. Updates were in the October 2016 Visa Core Rules and Visa Product and Service Rules rules, citing changes coming in April and October 2017. On April 27, 2017 Visa published further information for merchants via the Stored Credential Framework document, which also references prior articles published on the subject dating back to 2016.

For most merchants, the mandate went into effect October 14, 2017, not April 2018, however, Visa did announce a delay in compliance action to April 2018.

From Recurly, “There is no action needed from our customers.” While technology solutions and payment gateways manage technical aspects for compliance, there’s much that’s left to merchants. Here’s an excerpt from the Stored Credential Framework document:

Merchants and their third-party agents, payment facilitators, or stored digital wallet operators that offer cardholders the opportunity to store their credentials on file must:
• Disclose to cardholders how those credentials will be used.
• Obtain cardholders’ consent to store the credentials.
• Notify cardholders when any changes are made to the terms of use.
• Inform the issuer via a transaction that payment credentials are now stored on file.
• Identify transactions with appropriate indicators when using stored credentials.

I strongly recommend reading Visa Core Rules Table 5-20: Requirements for Prepayments and Transactions Using Stored Credentials and Disclosure to Cardholder and Cardholder Consent. For example, how will you provide proof of cardholder consent (think time and date stamp) upon request? Are you providing the required receipt with proper format for zero dollars when storing a card without running a transaction?

Note: This article is not a review, endorsement or complaint about the quality of Recurly services which I have never used. It is simply identifying errors and omissions related to the stored credential mandate that may impact merchant profits, risk and decision making. I would have written in their blog comments, but it wasn’t available. When choosing a payment gateway, consider how agile they’ve been in meeting deadlines for changes, and how they’ll help reduce compliance burden, among other factors.

Christine Speedy, CenPOS Authorized Reseller, 954-942-0483 is a PCI Council QIR certified professional based out of South Florida, near Fort Lauderdale, and Rochester, NY, with extensive payment gateway experience. Christine can uniquely help merchants and technology providers navigate the complexities of PCI, acquirer, and card brand compliance rules.

Are You Compliant? B2B Credit Card Processing Fact Check

Merchant compliance with various credit card processing rules maximizes profits while mitigating risk. This is especially true for business to business companies. But that task is getting harder and harder with the onslaught of new rules, and virtually impossible if not using a sophisticated cloud solution to help manage compliance.

b2b visa stored credentialIf your B2B company stores credit cards, there’s a pretty good chance you’re not compliant. For example, Visa’s 2017 Stored Credential Transaction framework (PDF download from Visa) outlines merchant responsibilities to obtain customer consent as well as storing credit cards, using stored credentials (token), and managing stored tokens. Failure to comply with Authorization rules, for example preauthorization and final settlement do not match, has far-reaching consequences including higher interchange rates (the bulk of credit card processing fees), penalty fees and new chargeback risks. With so many new rules across multiple card brands that vary based on business and transaction type how can a business quickly ascertain if they’re compliant?

Quick tips to validate compliance:

  1. Is cardholder authentication performed when a new card is stored? When the cardholder data is entered and submitted, the issuer responds with an approval or declined message. A small charge is not an acceptable practice to submit transaction for approval; instead a zero dollar authorization request for authentication is submitted. If authentication is via 3-D Secure -Verified by Visa, MasterCard Secure Code, whereby the customer self-authenticates vs merchant initiating, reduced rates may apply. Under the new rules, two transactions occur at the time a card is stored. Compliant answer is yes.
  2. Is a transaction receipt delivered to customer when you store a credit card? This will be either for an amount or a zero dollar authorization. When stored credit card credential (token) is created, a transaction receipt is generated with the approval or decline and other mandatory fields. Compliant answer is yes.
  3. Does the receipt include “RECURRING” or “REPEAT SALE” for token transactions? Compliant answer is yes.
  4. Review merchant statements, usually the last 1-2 pages with the heading “pending interchange” or “fees” section. Do you see EIRF, STANDARD (STD), or DATA RATE I? Compliant answer is no.
  5. Can you produce documentation of customer consent to store their card (including with 3rd party service) and how it will be used?

If you’re not in compliance, your payment gateway is the most likely culprit, followed by ERP or other software integration limitation. I can fix that.

Reference: Links for all Card brands.

Need help getting compliant?

Call Christine Speedy, , for simple solutions to complex payment transaction problems, 954-942-0483, 9-5 ET. CenPOS authorized reseller based out of South Florida and NY. CenPOS is an integrated commerce technology platform driving innovative, omnichannel solutions tailored to meet a merchant’s market needs. Providing a single point of integration, the CenPOS platform combines payment, commerce and value-added functionality enabling merchants to transform their commerce experience, eliminate the need to manage complex integrations, reduce the burden of accepting payments and create deeper customer relationships.

Delay in Compliance Action for Visa Stored Credential Framework

From the Visa Merchant Business News Digest, October 17, 2017.

In the 1 September 2016 edition of the Visa Business News, Visa introduced new rules related to credential-on-file transactions, including merchant disclosure requirements and transaction identifier requirements went into effect for merchants and acquirers on 14 October 2017.

However, based on stakeholder feedback, and after assessing market readiness and taking into account the holiday season system freeze, Visa will extend the time to make the necessary system changes until 30 April 2018.

While the rule is still effective as of 14 October 2017, Visa will not take any compliance action or assess non-compliance assessments to non-compliant entities prior to 30 April 2018. Entities that comply with the rule by 30 April 2018 will not be required to submit a waiver request to Visa.

https://usa.visa.com/support/merchant/library/visa-merchant-business-news-digest.html

End Visa bulletin.

The stored credential framework applies to all merchants that store credit cards. Note, while some stakeholders were not ready as per the above statements, CenPOS was. CenPOS replaces other payment gateways, for example authorize.net, as well as solutions such as BillTrust, while enabling customers to keep their acquirers and other partners.

See more info here https://usa.visa.com/dam/VCOM/global/support-legal/documents/stored-credential-transaction-framework-vbs-10-may-17.pdf

Christine Speedy, CenPOS authorized reseller, 954-942-0483. CenPOS is a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement. CenPOS secure, cloud-based solution optimizes acceptance for all payment types across multiple channels without disrupting the merchant’s banking relationships.

Magento Developer Alert: Visa Mandate and Payment Gateways

How can Magento developers help merchants get compliant with the Visa Stored Credential Transaction framework and mandates effective October 14, 2017?

Drive your profits while helping clients keep compliant with fast changing credit card processing rules.

Step by step guide:

How will clients manage consent record requirements? See Improving Authorization Management for Transactions with Stored Credentials https://usa.visa.com/dam/VCOM/global/support-legal/documents/stored-credential-transaction-framework-vbs-10-may-17.pdf . Will gateway provide a checkbox for consent records and ability to retrieve records on demand? (I called authorize.net on October 2 and they advised they will not offer this service, and will leave up to merchants.) Will you develop a custom application to include opt-in date, time and other requirements, plus storage and retrieval capability? Will you advise merchants to choose a technology solution, including payment gateway, that will manage automatically?  CenPOS, a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement will provide an automated solution for clients. Contact me for the plugin.

Update terms and conditions. Ensure online order terms include sale, refund and cancellation policies. Add a checkbox for customer opt-in to terms, including online payments. CenPOS has an opt-in box and you can customize the text.

Verify if there’s a system to manage authorization validity. What the heck does that mean? Many businesses, especially B2B companies, have complex needs including pre-authorizations, incremental authorizations, delayed shipping etc. While merchants may get issuer approvals, that doesn’t mean the authorization is valid. The two most common rules businesses struggle with are “Settlement within 72 hours” for card not present sales, and “Authorization amount and settlement amount must be equal”. (I asked authorize.net support about both items on October 2 and was told they do not offer automated solution.) CenPOS automates compliance. Other payment gateways are incapable or may leave it up to developers to create a solution. How can a developer verify if merchant has an issue? Ask clients to look at their merchant statement ‘pending interchange fees. If you see EIRF or STD, that’s a red flag there’s a problem.

Create a hosted pay page. B2B Businesses almost always have more than one sales channel and use of paper credit card authorization forms is common. They need help to eliminate. You already have the SSL certificate, so it’s a natural add on to provide clients a secure web page with an iframe a solution to collect payments. With CenPOS, end customers can use the same stored credential in Magento and the pay page, both credit card and ACH. hosted online pay pagePrevent brute force attacks. System hardening is a PCI compliance requirement. See Visa best practices to prevent brute force attacks. https://usa.visa.com/support/merchant/library/visa-merchant-business-news-digest.html. CenPOS includes recaptcha and client managed velocity and other rules as part of a layered security approach.

Payment Gateway checklist:

  • Verify payment gateway will send correct transaction data and flags for the initial transaction and subsequent transactions.
  • Advise clients to set gateway for zero dollar authorization when storing a new card.
  • Ensure client is registered for 3-D Secure and it’s enabled.
  • Confirm if gateway will automatically flag a transaction as customer initiated stored credential or merchant initiated stored credential (automated recurring billing). Additionally, the merchant initiated transaction must be sent with the MOTO indicator, not ecommerce.
  • Does gateway support level 3 data?

CenPOS manages all compliance and other items seamlessly in the background.

Communicate with clients. Advise any upcoming changes will increase efficiency and security for everyone. Advise clients to learn more about CenPOS payment gateway – call Christine Speedy, 954-815-6040.

Why comply? With full compliance and following my recommendations, merchants can expect better qualified interchange rates, increased approvals (avoid declines based on issuer risk averse algorithms), reduced PCI Compliance burden, fraud liability shift to issuer and increased efficiency for both buyer and seller. The cost of non-compliance is hefty, including higher interchange rates, penalty fees, and risk of both issuer and cardholder chargebacks.

interchange rate qualification

The same transaction can process at different rates as shown above, depending on which rules you follow. CenPOS Smart Rate Selector automates compliance to qualify transactions at the lowest rate possible. Which rates are on your merchant statement now?

Magento developer billing: Developers also need to comply with recurring billing requirements for your sales. What’s worked before is not compliant- everyone needs to change.

Resources and documentation /blog/merchant-bulletins-downloads – bookmark it!.  Join Christine Speedy’s email list.

DISCLAIMER: condensed and incomplete information! Information may be quickly outdated.

With the fast pace of changing rules, developers need a technology partner to automate compliance. Did you know?

  • For those not ready to give up paper, CenPOS creates a printable PCI Compliant credit card authorization form for every stored card.
  • CenPOS has ERP, ecommerce shopping cart, accounting and other plug-in modules available for quick and easy implementation.
  • I’ve been selling for CenPOS since day 1. Though I have other payment gateways available in my arsenal, nothing else compares for meeting business to business needs.

Christine Speedy, CenPOS authorized reseller, 954-942-0483 is based out of South Florida and NY. CenPOS is a merchant-centric, end-to-end payments engine that drives enterprise-class solutions for businesses, saving them time and money, while improving their customer engagement. CenPOS secure, cloud-based solution optimizes acceptance for all payment types across multiple channels without disrupting the merchant’s banking relationships.

Installment Prepayments Credit Card Processing Rules Change 2017

Installment prepayment credit card processing rules change effective October 2017 will impact business profits and chargeback risk. Everyone in the payment ecosystem has or will need to make changes to comply, including acquirer, issuer, payment gateway, merchant, and sometimes software solution.

payment gateway SaaS recurringInstallment prepayment credit card processing best practices:

  • When capturing card data to create a random token replacing sensitive data for the first time, perform an Account Number Verification Transaction via a Zero Dollar Authorization. There’s a payment gateway procedure, including using specific transaction indicator, for this. If the solution you’re using performs a $1 authorization, often with a void or reversal after, that’s because the payment gateway, and or the implementation, are out of date and don’t support current requirements. Ask how yours works and contact us for help now if you cannot do a zero dollar authorization!
  • Payment gateway to identify all future transactions after storing:

With an indicator that shows that the Transaction is using a Stored Credential
– With the Transaction Identifier of the initial Transaction.

  • The sales receipt must include phrase “recurring transaction”
  • A convenience fee cannot be charged on an Installment Transaction.
  • Transactions cannot be key entered into desktop terminals; a cloud based payment gateway is required

Guidelines and rules vary by card brand, business type and many other factors. Additionally, the rules are complicated. This article may oversimplify such complexities. Merchants are advised to use tools, including intelligent payment gateways, to help comply automatically to maximize profits and mitigate risk.

Reference: For example, read Visa Stored Credential Transaction Mandates and also Visa Core RulesTable 5-21: Requirements for Prepayments and Transactions Using Stored Credentials.

Before selecting a payment gateway for installments, ask these questions:

  • How will it help with new Visa Stored Credential Mandates compliance?
  • Does it support 3-D Secure cardholder authentication, for customer initiated payment?
  • What type of digital record is created at the time of customer opt-in to terms, how is it retrieved, and how long is it retained?
  • Does it support Zero Dollar Authorization?
  • Does the receipt dynamically change based on type of transaction, i.e. cash, credit card single payment, installment payment etc.
  • Does it level 3 processing for commercial cards (if applicable to business type)?
  • If I change banks or payment processors, how will it affect my customers? My business?

TIP: An easy starting point to reduce the list of options is to ask any payment gateway what type of digital record is created at the time of creating an installment agreement, and how will you access it? Need help to get compliant? Contact Christine Speedy to learn more about solutions for your business that are quick and easy to adopt, increasing efficiency and growing profits virtually overnight.