Dates Visa MasterCard Discover American Express. Acquirers, subprocessors. support EMV. International ATM liability shift2

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1 Network Updates Fall 2015 We are committed to working closely with you on achieving your business goals. As a part of this commitment, we carefully monitor Network changes and summarize them for your convenience. Following is the summary of information from American Express, Discover Network, MasterCard Worldwide and Visa U.S.A. regarding changes or updates to interchange rates, operating rules and regulations and other changes that may impact your company. We encourage you to call your Relationship Manager or our Contact Center at the number located on your monthly statement with any questions you may have regarding this information. Except where otherwise noted, all changes are effective October 16, EMV Update on Card Schemes Acceleration of Chip Migration (EMV) The Program: MasterCard, Visa, American Express and Discover have released their roadmaps to EMV (Europay, MasterCard and Visa). These roadmaps begin the discussion of their plans to accelerate the migration to EMV chip technology in the United States. The card schemes roadmaps will help prepare the U.S. payment system for the arrival of mobile payments by building the necessary infrastructure to accept and process chip transactions. Dates Visa MasterCard Discover American Express April 2013 Acquirers and subprocessors must support EMV Acquirers and subprocessors must support EMV International ATM liability shift2 Acquirers, subprocessors and direct connect merchants must support EMV data elements Acquirers and subprocessors must support EMV, including mobile October 2013 Merchant Account Data Compromise (ADC) relief (Phase I) Acquirers, subprocessors and direct connect merchants must support EMV data elements for Pulse transactions April rd Party ATMs must support EMV October 2015 US Liability Shift1 US Liability Shift2 Merchant ADC Relief (Phase II) October 2016 October 2017 Automated Fuel Dispenser Liability Shift1 ATM Liability Shift2 Automated Fuel Dispenser Liability Shift2 US Liability Shift2 Automated Fuel Dispenser Liability Shift2 US Liability Shift2,3 Automated Fuel Dispenser Liability Shift2,3 ATM Liability Shift1 1 Liability for counterfeit transaction shifts to party who does not have support for EMV. 2 Liability for various counterfeit transaction shifts to party who has least-secure support for EMV 3 Includes the US and its territories as well as the Caribbean, Central/South American region 1

2 The Visa, MasterCard, Discover and American Express EMV programs Incentives for those merchants who upgrade to EMV chip-enabled terminals To encourage EMV adoption, Visa, MasterCard, Discover and American Express have each announced a waiver from annual PCI DSS validation. Contact your relationship manager for more information on the PCI DSS validation waiver. At least 75% of merchant s transactions originate from dual interface chip terminals and are capable of processing end-to-end chip transactions. The merchant has not been involved in a breach of cardholder data (merchants previously involved in a breach may qualify if they have completed subsequent PCI DSS validation). All merchants must continue to comply with PCI DSS. Program enrollment is required. For MasterCard, eligible merchants are Level 1 and Level 2 merchants MasterCard will allow for account data compromise relief October 2013 if 75% of transactions initiated at EMV compliant terminals - 50% relief October 2015 if 95% of transactions initiated at EMV compliant terminals - 100% relief Beginning October 2015, Visa, MasterCard, Discover and American Express will implement a liability shift for domestic and cross-border counterfeit transactions. Visa October 2015 Point-of-Sale liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV October 2017 Automated Fuel Dispenser merchants have extended timeframe in consideration of cost/complexity October 2017 ATM liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV MasterCard April 2013 International ATM liability shift based on hierarchy of which party has the most secure option enabled. October 2015 Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. Standard rules apply when both are equal. October 2016 ATM Liability Shift October 2017 Automated Fuel Dispenser Liability Shift 2

3 American Express Discover October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Automated Fuel Dispenser Liability Shift October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Automated Fuel Dispenser Liability Shift Information related to liability shifts and PCI-DSS validation waiver is a summary and is subject to the appropriate network s operating regulations. Contact your Relationship Manager for more detail. Support of EMV Debit Solutions by Regional PIN Debit Networks (Updates are in bold) The following Regional PIN Debit Network announcements have been made regarding EMV debit solutions. Vantiv is working with the regional networks to implement and certify required changes as the networks specifications become available. Debit Network Announced support of the Visa U.S. Common Debit EMV Solution Announced support of the MasterCard U.S. Common Debit EMV Solution Accel March 2014 March 2014 STAR February 2014 April 2014 Pulse March 2014 May 2014 NYCE April 2014 June 2014 CU24 April 2014 October 2014 CO-OP April 2014 October 2014 Shazam April 2014 July 2014 AFFN April 2014 October 2014 Presto! June 2014 August 2014 Alaska Option* July 2014 July 2014 MoneyPass November 2014 November 2014 To learn more about EMV and what Vantiv is doing to help merchants prepare visit our new EMV microsite. 3

4 Discover and American Express Modify Chargeback Reason Codes to Support U.S. EMV Liability Shift The Program: In support of the U.S. EMV liability shift, Discover and American Express have created new dispute reason codes applicable to transactions that occurred with a chip card where the point-of-sale acceptance device was not capable of reading a chip card or does not support chip and PIN. American Express Dispute Reason Codes When Applicable A cardholder indicates the transaction is fraudulent The transaction occurred on a F30 Counterfeit Fraud Chip Card counterfeited chip card Terminal was not enabled to read chip cards and the card was swiped at the point-of-sale F31 Lost/Stolen Fraud Chip & PIN A cardholder disputes a transaction as Lost/Stolen The transaction occurred on a Chip and PIN card Terminal that is not capable of accepting a Chip and PIN Dispute Reason Codes UA05 Fraud Chip Card Counterfeit UA06 Fraud Chip and PIN Discover When Applicable Contact chip card/device Terminal was not enabled to read chip cards and the card was swiped at the point-of-sale Cardholder did not approve or participate in the transaction PIN-supporting contact chip payment card/device Terminal did not support PIN entry The card was lost/stolen at the time of the transaction The Impact: Merchants with point-of-sale devices that are not capable of reading a chip card or do not support chip and PIN may be subjected to fraud-related disputes. 4

5 MasterCard MasterCard Revises Standards for Processing Authorizations and Preauthorizations The Program: MasterCard is introducing a multitude of authorization processing changes that include: new methods to identify the type of authorization, changes to authorization reversal timeframes, discontinuance of the 15/20 percent transaction amount tolerance for T&E and gratuities, changes to chargeback timeframes and the extension of incremental authorizations for all merchant types. The Change: These revisions will help issuers effectively manage cardholders open to buy and chargeback protection maximum timeframe limits, based on authorization types. As a result, MasterCard is also implementing Data Integrity edits and a Processing Integrity Program to ensure the authorization changes are being adhered to. The authorization and processing changes are outlined in the tables below: All Regions (Excludes Europe) Support of Revised Standards for Processing Authorizations and Preauthorizations Changes not applicable to: Automated Fuel Dispenser (AFD) MCC 5542 Contactless transactions Transit aggregated or debt recovery transactions Pre-authorizations or authorizations with expired chargeback protection timeframe Private label and non-mastercard branded transactions Offline approved transactions MasterCard Authorization Types Pre-Authorization: Authorization amount greater than zero, final authorization amount is unknown (e.g., hotel, car rental, e-commerce, MO/TO, restaurants). Original authorization amount may be adjusted when the final transaction amount is greater than the original authorized amount. Chargeback protection: 30 days (calculated from latest authorization date) Final Authorization: Authorization amount greater than zero, final transaction amount is known (e.g., card present, retail). The approved amount cannot be cancelled. The transaction must submit the sale for the transaction approved as the final auth. Chargeback protection: 7 days (calculated from authorization date) Undefined Authorization: Authorization amount is greater than zero; the final transaction amount may be different from the authorized amount. The approved amount cannot be cancelled after the authorization request is approved in full. Chargeback protection: 7 days (calculated from authorization date) Note: Undefined authorization is not a go-forward authorization type. MasterCard plans to have merchants and acquirers move from undefined to either preauthorization or final authorization types. Incremental Authorization: Authorization amount may be zero or greater than zero. When submitted as zero, it extends the original authorization timeframe for chargeback protection. It can be also used to initiate multiple pre-authorizations for the same transaction to increase the authorized amount and to extend the chargeback protection timeframe, or to only extend the chargeback protection amount when the incremental authorization is submitted with a zero dollar amount. 5

6 Authorization Changes Description Current Effective October 14, 2016 Full or Partial Authorization Reversals Used to cancel a previously authorized transaction (full reversal) or when the transaction amount is less than the amount approved (partial reversal) Chargeback Protection Timeframes 24 hours- Card present (non- T&E) 72 hours- Card-not-present (non-t&e) 20 days- T&E Transaction must be cleared within 120 days of the authorization data Note: Issuers may hold cardholder funds 7 to 30 days from the authorization date or when clearing is received. Transaction date to settlement date 7 days 24 hours- Card present and cardnot-present A partial reversal will not be required if the transaction is submitting for clearing to MasterCard within 24 hours of finalizing the transaction and the transaction amount is lower than the authorization amount Authorization date to clearing date 30 days- Pre-authorizations Reason Code 4808 (Authorization-Related Chargeback) 15/20 Transaction Amount Tolerances Currently, no limit between the authorization date and transaction date Authorization to clearing amount 15% Hotel/Motel Vehicle Rental Cruise Lines Related Repair 20% for gratuities Chip/PIN Contactless Card present Card-not-present If the final transaction amount doesn t exceed the approved amount by the associated %, the merchant is not required to obtain an additional authorization. 7 days- All other MasterCard Authorizations Gratuity must be added directly in the authorization amount Tolerance for incidentals and gratuities is still available to card present transactions that are not chip/pin or contactless when the transaction is coded as a preauthorization or undefined authorization 6

7 Incremental (Multiple) Authorizations (Car Rental Agencies) 4411 (Cruise Lines) (Hotels/Motels/Resorts) 7011 (Hotels/Motels/Resortsnot elsewhere classified) 7512 (Automobile Rental Agency-not elsewhere classified) Available to all merchant types An incremental authorization may be submitted at a later time to extend the chargeback protection period for the same transaction. The 30 day chargeback protection timeframe is calculated from the date of the last approved authorization. Exclusions: MasterCard Contactless transit aggregated or debt recovery transaction Installment billing payment transactions identified as preauthorization New Authorization Data Integrity Edits and Monitoring Programs MasterCard is introducing two new Data Integrity edits to monitor support of undefined authorizations and preauthorizations. Preauthorization Monitoring and Fee Assessment January 1, 2017: Monitoring begins for preauthorization compliance January 1, 2017: Non-compliance reporting for Preauthorization produced and distributed by MasterCard for authorization volume over 25% June1, 2017: Fees for non-compliance may begin to be assessed Undefined Monitoring and Fee Assessment January 1, 2017: Monitoring begins for undefined authorization compliance January 1, 2017: Non-compliance reporting for Undefined produced and distributed by MasterCard June 1, 2017: Fees for non-compliance may begin to be assessed *NEW Authorization Not Reversed or Cleared June November 2016: Monitoring and reporting November 2016: Fees for non-compliance may begin to be assessed Criteria - A new fee will be assessed for each approved authorization that is: Not reversed based on the following timeframes: 30 calendar days of authorization date-preauthorizations 7 calendar days of the authorization date-undefined Not cleared based on the following timeframe: 120 calendar days of authorization for preauthorizations and undefined authorizations Note: This will replace the current Processing Integrity Fees for Late Reversals and No Clearing within 120 days of authorization. 7

8 MasterCard Eliminates Commercial Supermarket and Commercial Face-to-Face Interchange Programs The Program: MasterCard is eliminating the Commercial Supermarket and Commercial Face-to-Face commercial interchange programs. The Change: MasterCard has reported no transaction volume for their Commercial Supermarket interchange program since 2012, and as such, anticipates no merchant impact with the elimination of this interchange program. MasterCard s Commercial Face-to-Face interchange program follows the same processing rules and interchange rates as the Data Rate II program. Current Effective October 16, 2015 Commercial Face-to-Face Business Level 2 Face-to-Face Business Level 3 Face-to-Face Business Level 4 Face-to-Face Commercial Data Rate II Business Level 2 Data Rate II Business Level 3 Data Rate II Business Level 4 Data Rate II The Impact: With the elimination of the Commercial Face-to-Face interchange program, transactions currently qualifying for Commercial Face-to-Face will now qualify for Data Rate II. MasterCard Modifies Data Rate I Interchange Programs The Program: MasterCard will modify the Data Rate I interchange program for Healthcare Services MCCs. The Change: The new interchange rate will apply only to Business Debit/Prepaid and Large Market card products. The same qualification criteria for Data I will continue to apply. Data Rate I Interchange Program (Business Debit/Prepaid and Large Market) Healthcare 8011 Doctors not elsewhere classified 8021 Dentists, Orthodontists 8031 Osteopathic Physicians 8041 Chiropractors 8042 Optometrists, Ophthalmologists 8043 Opticians, Optical Goods, and Eyeglasses 8049 Chiropodists, Podiatrists 8050 Nursing and Personal Care Facilities Hospitals 8071 Dental and Medical Laboratories 8099 Health Practitioners, Medical Services not elsewhere classified The Impact: Healthcare Services merchants will see new interchange rates for Business Debit/Prepaid and Large Market card product transactions. 8

9 MasterCard Introduces New World MasterCard Black Edition The Program: MasterCard is introducing two new product codes, TWB and MBW, to uniquely identify World Black Edition debit cards and product code assignment will be based on country of issuance. TWB - Russia, Armenia and Belarus issuers MBW- Kazakhstan issuers The Change: TWB and MBW will be eligible for the existing interregional interchange programs. Interchange Fee Programs Interregional MasterCard Payment Transaction Fallback Interchange Program Interregional Consumer Super Premium Electronic Interregional Consumer Super Premium Full UCAF Interregional Consumer Super Premium Merchant UCAF Interregional Consumer Super Premium Standard MasterCard Introduces New Business Premium Debit Product in Australia The Program: MasterCard is introducing a new Commercial Business Premium debit product code applicable to issuers in Australia. The Change: New product code BPD will be eligible for the existing interchange programs. Interregional Interchange Fee Programs Interregional Commercial Payment Transaction Interregional Commercial Standard Intraregional Interchange Fee Programs Merchants located in the Asia Pacific Region Intraregional Commercial Payment Transaction Intraregional Commercial Standard Intraregional Commercial Large Ticket MasterCard Introduces New 2 Series MasterCard BIN Range The Program: As previously communicated in our Spring Newsletter, MasterCard is adding new primary account BIN ranges to be processed in the same manner as existing range The Change: The payments ecosystem must be ready to support the 2 Series MasterCard BINs by October 14, All Vantiv platforms will support the MasterCard 2 Series BIN range. The Impact: Merchants must be able to accept the new MasterCard BIN range in both card-present and card-not present payment acceptance channels. 9

10 Visa Visa Eliminates Referral Response Codes The Program: A referral response code informs a merchant to contact the card issuer at the point-of-sale. The issuer is to provide the merchant with instructions (e.g., validate that the cardholder is at actual location) before proceeding with the sale. This process is antiquated and does not promote speed at the point-of-sale, nor does it generate a positive cardholder experience. In most cases, acquirers and merchants will auto-decline a referral response and ask the cardholder for another form of payment. The Change: Effective April 2016, Visa will no longer permit issuers to respond to an authorization request with a referral response code. The Impact: The following authorization response codes will be eliminated: Refer to card issuer Refer to card issuer special condition Visa Modifies Time to Reverse a Card-Not-Present Authorization (Update) The Program: As previously communicated in our Winter 2014 Newsletter, Card-not-present merchants need to manage various authorization and clearing timeframes to prevent additional processing fees. Update: Visa has reduced the maximum time permitted to reverse a card-not-present authorization. The Change: Visa has reduced the maximum time permitted to reverse a card-not-present authorization from 7 calendar days to 72 hours from the date of the original card-not-present authorization. The 72 hour timeframe applies when the authorization amount is greater than the final clearing amount and to transactions that are not completed by the merchant; requiring a full authorization reversal. The Impact: Merchants will no longer have up to seven calendar days from the date of the original CNP authorization to reverse the transaction when an item of a single order cannot be shipped within the established card-not-present authorization to clearing timeframe. Visa Introduces New Digital Entity Identified for Visa Checkout The Program: Visa s Checkout product enables the storage of a consumer s payment credentials (e.g., payment card information, cardholder billing and shipping addresses) to facilitate online purchases from participating merchants. Merchants enrolled in Visa Checkout must display a Visa Checkout icon on the payment page allowing consumers to pay with one step by selecting Visa Checkout. The Change: Visa is introducing a new authorization and settlement indicator to identify Visa Checkout transactions throughout the lifecycle of the transaction. The Impact: Participating merchants must pass the new indicator when a transaction is generated using Visa Checkout. Merchants interested in supporting the Visa Checkout product should contact their Relationship Manager for additional information. 10

11 Visa Modifies U.S. Business Interchange Fee Program The Program: Visa is making changes to the existing Business Credit interchange fee program names and adding a new interchange fee program for Business Credit card transactions. The Change: Interchange fee programs for Business Credit will qualify for one of 4 tiers based on the cardholder s annual spend. Existing processing rules will continue to apply for the following Business Credit programs: Business-to-Business Retail Card Not Present Level 2 Electronic Standard The Impact: Merchant may begin to see the new interchange program names as associated with the applicable annual spend ranges: Existing Program Name Effective October 16, 2015 Annual Spend Ranges Business Business Tier 1 $19, or less Business Enhanced Business Tier 2 $20, to $39, Signature Business Business Tier 3 $40, to $99, N/A Business Tier 4 $100, or more Visa Expands Guaranteed Reservations and Modifies Rules for Payments for Amended Charges or Damages The Program: Visa permits hotels and specific U.S. Region car rentals to participate in Guaranteed Reservations. When a cardholder secures a reservation with a Visa card, a merchant may charge a cardholder a no-show fee if the cardholder does not cancel the reservation within the timeframes established by the merchant. Merchants participating in Guaranteed Reservations do not request a payment at the time of reservation; only the account number to secure the accommodation, merchandise, or service. The Change: Visa is expanding the types of merchants that may participate in Guaranteed Reservations. Guaranteed Reservations ensure that the merchant will honor a cardholder s reservation when a Visa card is used for payment. The following merchant types are currently eligible for guaranteed reservations: Lodging Car rental With the program s expansion, the following merchants are also eligible for guaranteed reservations: Aircraft rental Bicycle rental Boat rental Equipment rental Motor home rental Motorcycle rental Truck and trailer rental Trailer park or campground 11

12 Guaranteed Reservations Merchant Requirements Properly disclose the reservation conditions to the cardholder at the time of reservation Provide the cardholder a written reservation confirmation with all required disclosures at the time of the reservation or within 24 hours if the reservation was placed over the phone Provide the cardholder a minimum of 24 hours after reservation confirmation to cancel the reservation without penalty At minimum, hold the reservation for at least 24 hours after the agreed start time of the reservation. This does not apply if the cardholder cancels the reservation within the timeframe of the merchant s cancellation policy Merchants that fail to hold the reservation within 24 hours of the agreed start time must provide the cardholder with a comparable accommodation, merchandise, services, and pay for associated costs until the reserved accommodation, merchandise, or services become available A No-Show transaction may be submitted if the cardholder did not claim the reservation or properly cancel the reservation based on the merchant s disclosure and cancellation policy. The No-Show fee amount cannot exceed one day Transaction Submission for Delayed or Amended Charges Eligible merchants may charge the cardholder an ancillary transaction for an amended amount or a delayed charge when the cardholder participated in the transaction and received merchandise or services. Merchant participants must meet the Visa point-of-sale conditions for delayed or amended charges as outlined in the Visa Core Rules and Visa Product and Service Rules. Amended transactions may be submitted to pay for items such as insurance, rental fees and must be submitted within 24 hours of check-out or rental return. Delayed transactions may begin to be submitted to pay for damaged, lost, or stolen merchandise. Other examples of possible delayed transactions are tolls, parking tickets, fuel, and mileage. Delayed transactions must be submitted within 90 calendar days of the rental return, check-out, or disembarkation date. Note: Prepayment cannot be used to pay for damage, theft or loss of use. The following merchant types are currently eligible for submission of delayed or amended charges: Lodging Car rental Cruise Line With the program s expansion, the following merchants are also eligible for delayed or amended charges: Aircraft rental Bicycle rental Boat rental Equipment rental Motor home rental Motorcycle rental Truck and trailer rental Trailer park or campground 12

13 Visa Mandates Support of the Form Factor Indicator for Visa paywave Canada and LAC The Program: A form factor is used to identify if a contactless chip originated from a device such as a plastic card, mobile phone, or fob. The form factor may be used to track acceptance trends or identify merchant processing impacts from specific form factors. The Change: Canada and LAC Region merchants who accept contactless payments supporting paywave specification v2.1 or higher must accept and send the Form Factor Indicator (FFI) in both the authorization and settlement messages, when collected by the contactless reader at the time of purchase. The Impact: Merchants in these regions will be required to accept and send the following Form Factor Indicator values in authorization and settlement messages: 0 - Full size standard card non-contactless 1 - Full size contactless card 2 - Standard mini non-contactless card 3 - Contactless mini card 4 - Micro tag 5 - Mobile device Visa Changes to Floor Limits in the AP and LAC Regions The Program: Visa is updating the contactless authorization floor limits for designated regions. The Change: Any authorization amount above an established floor limit must be authorized online. Visa has a zero floor limit for contactless transactions in the LAC and AP Regions Unattended terminals operated in the AP and LAC Regions will change to $40 for contactless transactions Visa has a Zero floor limit for contactless transactions in all countries except for the following: Bahrain Brazil Egypt Indonesia Saudi Arabia Jordan Kuwait Lebanon Malaysia Singapore Morocco Oman Philippines Qatar Thailand United Erab Emirates Visa has changed the floor limit for contactless transactions to $40 for unattended terminals operated in all regions except for the following countries: Australia Canada Colombia Costa Rica Nigeria Dominican Republic Ecuador El Salvador Guatemala Pakistan New Zealand Japan Mexico Honduras Panama South Korea 13

14 Visa Discontinues the Asia Pacific (AP) Regional Recurring Interchange Fee Program The Program: Visa is removing the AP Regional Recurring interchange program for consumer credit and debit cards. The Change: Transactions currently qualifying for the AP Intraregional Recurring Payment interchange program will now qualify at the AP Intraregional Standard interchange program. Consumer Recurring Payment Transactions Current Effective October 16, 2015 AP Intraregional Recurring Payment AP Intraregional Standard Credit/Debit AP Intraregional Standard Gold Credit/Debit AP Intraregional Standard Platinum/Rewards Credit/Debit AP Intraregional Standard Signature/Infinite/Ultra High Net Credit/Debit Visa Extends the Platinum Prepaid Card Product for Certain Regions The Program: Visa is extending the Visa Platinum Prepaid card for issuers in the Asia/Pacific, Canada, CEMEA and LAC regions. The Change: Visa Platinum Prepaid card transactions will be eligible for the following existing interchange programs. Interchange Fee Programs Interregional Premium Card AP Intraregional Acquirer Chip Platinum AP Intraregional Issuer Chip Platinum AP Intraregional Ecommerce Merchant Platinum AP Intraregional Secure Ecommerce Platinum AP Intraregional Standard Platinum Debit LAC Intraregional Premium Visa Introduces New Business Rewards Product for the Asia Pacific (AP) Region The Program: Visa is introducing a new Visa Business Rewards card in the Asia Pacific region with a new product ID code (G5). The Change: The new Business Rewards card can be issued as either a credit or a debit product and will be eligible for the following existing interchange programs. Interchange Fee Programs Interregional Business Card AP Intraregional Ultra High Net Standard Intraregional Ultra High Net Stand Debit 14

15 Visa Introduction of the Visa Prepaid Fleet Card in the Latin American (LAC) Region The Program: Visa is introducing the Visa Prepaid Fleet card in the Latin America region that will be identified with an existing product ID code (S1). The Change: The new Prepaid Fleet cards will be eligible for the following existing interchange programs. Interchange Fee Programs Interregional Purchase Card AP Interregional Purchase Card LAC Intraregional Purchase Card Discover Discover Updates to Address Verification Service (AVS) Requirements The Program: Discover is making changes to their Address Verification Service (AVS) requirements for PSL Card- Not-Present and Commercial Electronic Interchange Programs. The Change: Discover will no longer require AVS for a recurring payment transaction. PSL Card Not Present Current Effective October 16, 2015 AVS must be submitted at the time of the authorization AVS must be submitted at the time of the authorization, with the exception of a recurring payment transaction. Commercial Electronic Current Effective October 16, 2015 If the card sale occurs in a card-notpresent environment, AVS must be submitted at the time of the authorization with the exception of certain MCCs (Insurance, Emerging Markets, Hotels/Car Rentals & Passenger Transport) If the card sale occurs in a card-not-present environment, AVS must be submitted at the time of the authorization with the exception of recurring payment transactions, card sales with a mobile payment device (mcommerce) or certain MCCs (Insurance, Emerging Markets, Hotels/Car Rentals & Passenger Transport) 15

16 Discover Renames PSL Card-Not-Present/E-Commerce Interchange Program The Program: Discover is renaming their PSL Card-Not-Present/e-commerce interchange program as the PSL Card-Not-Present interchange program. The Change: E-commerce transactions will no longer be eligible for PSL Card Not Present and will shift to a new interchange program, PSL E-Commerce. Discover Introduces New Ecommerce Consumer Interchange Program The Program: Discover is introducing a new consumer card interchange program for e-commerce transactions. The Change: Consumer credit, debit, and prepaid e-commerce transactions will be eligible for the new program when the minimum transaction requirements are met: Transaction is conducted over the internet, including Mobile Commerce (mcommerce) Address verification must be submitted at the time of the authorization with the exception of recurring payments and card sales with a mobile device Transaction must be settled within 7 days NRID must be submitted in the sales data Merchant and Issuer are in the U.S. PSL E-Commerce Consumer Non-Regulated Debit/Prepaid Consumer Core Consumer Rewards Consumer Premium Consumer Premium Plus The following Merchant Category Code groups are not eligible: Utilities Real Estate Insurance Emerging Markets Public Services Hotels/Car Rentals Passenger Transport Quasi Cash High Risk Restaurants only when the card is a Premium or Premium Plus The Impact: Merchants may see the new interchange fee descriptors and recognize a shift in interchange programs for e-commerce transactions 16

17 Discover Tokenization The Program: Discover is implementing multiple changes to authorization and settlement messages to support wallet In-App and In-Store transactions. Discover is also adding new token BIN ranges to support the protection of primary account numbers stored in a payment wallet and used for processing the transaction. In-App and In-Store examples are outlined below: In-app Authentication: CAVV Program Cardholder initiates a sale using their phone to access a merchant s application. Authorization of the cardholder is performed within the merchant s application. In-app Authentication: Contactless DPAS Cryptogram Cardholder initiates a sale using their mobile phone to access a merchant s application. Authentication of the cardholder is performed within the secure element in the phone. In-Store: DCVV Format Cardholder initiates a sale using their mobile phone with a secure element and the merchant supports non-emv contactless. In-Store: Contactless DPAS Cardholder initiates a sale using their mobile phone with a secure element and the merchant supports EMV contactless. The Impact: Merchants that choose to support Discover In-App or In-Store transaction processing should ensure the authorization request is properly formatted, the ability to accept the data returned in the authorization response, and that settlement messages are properly populated. Vantiv systems are being updated to support Discover In-App and In-Store transaction level indicators and token account ranges. Discover s Token IIN Ranges are provided below: Discover Token IIN Ranges Payment Token Consumer Credit - Rewards Payment Token Consumer Credit - Premium Payment Token Commercial Credit Payment Token Consumer Debit Payment Token Consumer Debit Payment Token Consumer Debit Payment Token Consumer Debit Payment Token Consumer Credit - Rewards Payment Token Consumer Credit - Premium Payment Token Commercial Credit 17

18 Payment Token Exempt Consumer Debit Payment Token Consumer Debit Payment Token Consumer Debit Payment Token Commercial Debit Payment Token Prepaid ID Known Payment Token Prepaid Gift Payment Token Consumer Credit Rewards Payment Token Consumer Credit Premium Payment Token Commercial Credit Payment Token Consumer Debit Exempt Payment Token Consumer Debit Exempt with fraud prevention adjustment Payment Token Consumer Debit Exempt without fraud prevention adjustment Payment Token Consumer Debit Exempt Payment Token Commercial Debit Exempt Payment Token Commercial Debit Exempt with fraud prevention adjustment Payment Token Commercial Debit Exempt without fraud prevention adjustment Payment Token Prepaid ID Known Exempt Payment Token Prepaid ID Known Exempt with fraud prevention adjustment Payment Token Prepaid ID Known Exempt without fraud prevention adjustment Payment Token Prepaid Gift Exempt Payment Token Prepaid Gift Exempt with fraud prevention adjustment Payment Token Prepaid Gift Exempt without fraud prevention adjustment American Express American Express BIN Range Availability The Program: American Express payment products could begin with either a 34 or 37 Bank Identification Numbers (BIN) range, however, at this time American Express only has licensed BINs starting with the 37 BIN range. The Change: American Express is reminding merchants and transaction processing participants to be prepared to accept and process transactions that begin with a 34 BIN Range as early as October The Impact: Merchants may begin to see American Express transactions in the 34 BIN range. 18

19 Tokenization Reminder Visa, MasterCard, American Express, and Discover The Program: Tokenization is the use of a surrogate value in place of the Primary Account Number (PAN) in a transaction. The use of a token minimizes exposure of sensitive data reducing the risk of compromise or accidental exposure and/or unauthorized access to sensitive data. There are two token options currently used by American Express, Discover, MasterCard and Visa: Near Field Communication (NFC) In-app Near Field Communication (NFC) In-App To perform an NFC transaction, the cardholder launches the payment application on a mobile device (phone). After the cardholder taps the phone to credit card terminal, they will be prompted for the applicable Cardholder Verification Method (CVM). Examples are No CVM, (based on transaction amount), PIN, or Signature. The transaction is validated within the secure element (SE). The terminal then sends a contactless authorization request to the Acquirer, with the Token data in existing PAN fields along with contactless data elements. The Acquirer will receive an authorization response message contain the last 4 digits of the true PAN, response cryptogram (if applicable), and Token Assurance Level that is then forwarded to the merchant with the approval or decline response. An in-app transaction is an e-commerce transaction conducted on a phone or tablet. When the cardholder initiates a payment on an e-commerce site, a token is used in lieu of the PAN data along with additional Payment Token-related data. The POS entry mode will be set to indicate e-commerce transaction in the authorization request. The Acquirer will receive an authorization response message containing the last 4 digits of the true PAN, response cryptogram (if applicable), and Token Assurance Level. The cardholder is notified of the success or failure of the transaction. Split shipments and recurring payments may be supported, by brand, and will follow the Payment Network s existing processes and rules. 19

20 Chargebacks Visa Compelling Evidence The Program: Compelling evidence is information or documentation that a merchant can provide to prove the cardholder either used the goods/services or benefited from a transaction when filing chargeback representment on a disputed transaction. The Change: Visa will expand the type of evidence that merchants/acquirers can provide with the chargeback representment by changing existing and introducing new representment rules. Visa will also begin to include digital goods, mail order/telephone order, travel and entertainment, airlines and recurring payments. Chargeback Reason Codes 30/ / Compelling Evidence Changes Effective on or after October 17, 2015 Representment or Pre-arbitration Valid Compelling Evidence Types Condition(s) To prove a link between the person receiving the merchandise or services and the cardholder or To prove that the cardholder disputing the transaction is in possession of the merchandise and/or is using the service. E-commerce transaction representing the sale of digital goods downloaded from a website or application, description of the goods or services successfully downloaded, the date and time such goods or services were downloaded. Such as: Photographs s At least two of the following: Purchaser s IP address and the device s geographical location at the date and time of the transaction. Device ID number and name (if available). Purchaser s name and address linked to the customer profile on record with the merchant. Evidence that the profile set up by the purchaser on the merchant s website or application was accessed by the cardholder and successfully verified by the merchant before the transaction. Proof that merchant s website or application was accessed by the cardholder for goods or services on or after the transaction date. Evidence that the device and card used in the disputed transaction were the same as in any previous, undisputed transactions. 20

21 30/ / For a transaction in which merchandise was delivered to a business address. Evidence that the merchandise was delivered and that, at the time of delivery, the cardholder was employed or is working for the company at the address. *A signature is not required as evidence of delivery. Mail Order/Telephone Order transaction Signed order form Passenger Transport *No longer required for Reason Code 30 Any of the following: Proof ticket was received at cardholder s billing address. Evidence that boarding pass was scanned at gate. 30/ / / Travel and Entertainment when services were provided Not a specific merchant or transaction type Not a specific merchant or transaction type Details of frequent flyer miles relating to the disputed transaction that were earned or redeemed, including address and telephone number that establish a link to the cardholder. Evidence of additional transactions related to the original transaction, such as purchase of seat upgrades, payment for extra baggage or purchases made on board the aircraft. Either of the following: Details of loyalty program rewards earned and/or redeemed, including an address and telephone number that establish a link to the cardholder. Evidence of the following additional transactions related to the original transactions that were not disputed: Purchase of room, vehicle upgrades or purchases made throughout the hotel stay/vehicle rental. Such as: Evidence that person who signed for the merchandise was authorized to sign for the cardholder or is known by the cardholder. Such as: Evidence of one or more undisputed payments for the same merchandise. 21

22 Recurring Transactions Digital Goods MCCs: All of the following: Legally binding contract held between cardholder and merchant. Proof cardholder is using the merchandise or service. Previous, undisputed transaction. All of the following: Merchant is the owner of the operating system for the subject electronic device. The merchant has been successfully registered into and continues to participate in the Visa Digital Commerce Program. The account set up on the merchant s website or application was accessed by the cardholder and successfully verified by the merchant before or on the transaction date. The disputed transaction used the same device and card as any previous, undisputed transactions. Proof that the device ID number, IP address and geographic location and name of device (if available) are linked to the cardholder profile on record with the merchant. Description of the goods or services and the date and time they were purchased successfully downloaded. Customer name linked to the customer profile on record at the merchant. The customer password was re-entered on the merchant s website or application at the time of purchase. The merchant validated the card when the cardholder first linked the card to the customer profile on record at the merchant. 22