Reconsidering Key Entry and Voice Authorizations

Transcription

1 Reconsidering Key Entry and Voice Authorizations Katie McSparron, Leader Enterprise Relationships, Vantiv Eric Cofer, Leader Enterprise Relationships, Vantiv Thursday, February 16 th 3:45-4:30PM

2 Learning Objectives Objective 1 Understand the recent network rule changes impacting key entry and CVV2/CVC2 - including the benefits and risks Objective 2 Consider different strategies for offline transactions that may or may not include voice authorization Objective 3 Apply this information to your current card acceptance practices and formulate a card acceptance strategy for your business

3 Discontinued Key Entry Requirements Visa Effective April 2017, key entry will be optional Merchants must be able to process both EMV chip and magnetic stripe in order to stop key entry MasterCard Effective April 21, 2017, key entry will be optional ALL merchants (EMV or magnetic stripe only) can stop acceptance of key entered transactions Discover Effective now Merchants may decide to not accept key entered transactions at the point of sale.

4 Discontinued CVV2/CVC2 in Lieu of Imprint Visa Effective April 2018, merchants can no longer collect CVV2 for CHIP, Contactless, or Mag Stripe card present transactions MasterCard Effective April , merchants can no longer collect CVC2 for CHIP or Contactless transactions Discover Merchants may continue to collect the CVV/CID

5 POS Considerations Temporary Shopping Pass Private Label/Co-Brand Customer Service Calls that may result in a key entered adjustment MOTO transactions that are identified as card present Specific business concepts or registers that may still require key entered sales, i.e. pharmacy, etc. BIN exclusions SKU exclusions

6 Risks of Continuing to Accept Key Entry Chargebacks resulting from key entered International transactions currently have no representment rights Potential for increased fraud Validating CVV2/CVC2 will no longer be a remedy for MasterCard reason code No Cardholder Authorization Visa reason code 81 - Fraudulent Transaction Card Present A signed imprinted sales draft will no longer be a remedy for MasterCard chargebacks A signed imprinted sales draft will still be a remedy for Visa.

7 Visa Chargeback Changes 22 reason codes will be consolidated in 4 categories Fraud Authorization Processing Errors Consumer Disputes A dispute will flow through two workflow processes 1 Allocation 2 - Most Fraud and Authorization disputes - Merchants can respond under certain conditions: - Compelling evidence - Credit issued - Manual imprint Collaboration - Interaction between Issuer and Merchant - Reduced timelines for response

8 Benefits - Network Fee Savings Key entered transactions are more expensive to accept Obtaining another form of payment that will swipe or dip will result in cost savings and improvement to your bottom line! $ MasterCard CVC2 Authorization Fee - all transactions with CVC2 $0.10 Visa Debit Transaction Integrity Fee - key entered without matching AVS $0.01 MasterCard Address Verification Fee all transactions with AVS

9 Benefits - Interchange Fee Savings Example interchange for a $100 sale MasterCard Credit Visa Credit $1.58 $1.68 $1.99 $1.27 $1.61 $1.90 $2.40 SuperMarket Swipe/Dip Retail Swipe/Dip Keyed EIRF $0.00 $0.50 $1.00 $1.50 $2.00 $2.50

10 Offline Transactions Strategies Hard decline Stand-In with merchant initiated floor limits Deferred Authorization/Store and Forward Voice Authorization Visa discontinued voice referral response code April 2016 Slow lane throughput Bad cardholder experience Chargeback and Interchange considerations

11 Conclusion Discuss with internal stakeholders how the network changes will impact the cardholder experiences that occur within your stores Understand the costs and risks associated with turning off key entry and/or voice authorizations Develop a payment acceptance strategy that incorporates the changes your company decides to implement

12 Disclaimer This presentation contains general information only. The MAG and its guest speakers are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Neither the MAG nor its guest speakers shall be responsible for any loss sustained by any person who relies on this presentation.