UPCOMING PAYMENT SCHEMES RULES CHANGES

Transcription

1 UPCOMING PAYMENT SCHEMES RULES CHANGES Sara Novakovič, Dispute Operations Department Koper, June 2017

2 CONTENT 1 Payment schemes groups and chargeback reason codes 2 MasterCard rules changes 3 Visa rules changes 4 American Express rules changes 2

3 PAYMENT SCHEMES GROUPS AND CHARGEBACK REASON CODES MasterCard Visa American Express Chargeback Guide Authorization-related Chargeback Cardholder Dispute Chargeback Fraud-related Chargebacks Point-of-Interaction Error To be 2018 MasterCard Dispute Resolution Initiative Visa Core Rules and Visa Product and Service Rules Chargeback reason codes (21) To be April 2018 Visa Claims resolution Chargebck reason codes consolidated in Fraud, Authorization, Processing Errors, Consumer Disputes Business and Operational Policies Retrieval Chargeback Types Authorization Chargeback Types Processing Error Chargeback Types Cardmember Dispute Chargeback Types Fraud Chargeback Types 3

4 MASTERCARD RULES CHANGES REVISED CARDHOLDER DISPUTE STANDARDS FOR INVESTMENTS AND SIMILAR DISPUTES MasterCard modified the cardholder dispute requirements for chargeback message reason code 4853 (Cardholder Dispute) to restrict the processing of certain chargebacks concerning investments, foreign exchange accounts, and similar disputes. Issuers are not entitled to process a cardholder dispute concerning these and other account-related services. Such services include, but are not limited to: withdrawal of account balances trading/investment decisions Chargeback right for transactions in which any value is purchased for gambling investment or similar purposes No chargebacks use of these chips or value unspent chips withdrawal of such value winnings, gains or losses resulting from the use of such chips or value 4.

5 MASTERCARD RULES CHANGES The issuer may use message reason code 4853 for: Goods or services not as described or defective Goods or services were not provided Digital goods were purchased totaling USD 25 or less and did not have adequate purchase controls Credit not processed Counterfeit goods Recurring transaction canceled prior to billing Addendum dispute or no-show hotel charge was billed Purchase transaction did not complete Timeshare agreement or similar service provision was canceled within Mastercard timeframe Credit posted as a purchase The issuer must not submit a chargeback using message reason code 4853 for: Payment Transactions and MoneySend Payment Transactions The cash back amount or any portion of the cash back amount MasterCard Commercial Payments Account transaction. A MasterCard Commercial Payments Account transaction occurs when PDS 0002 (GCMS Product Identifier) was MAP (MasterCard Commercial Payments Account) in the First Presentment/1240 message Failure to credit shipping or handling charges for buyer s remorse cancellations or returns A retail sale processed as a cash disbursement. Customers must accept these transactions and collect the difference in the interchange fee and cash directly from the acquirer. 5

6 MASTERCARD RULES CHANGES REVISED FRAUD EXPEDITED BILLING DISPUTE RESOLUTION PROCESS FORM MasterCard has revised and renamed the Expedited Billing Dispute Resolution Process (Fraud) Form (Form 412). Expedited Billing Dispute Resolution or Dispute Resolution forms may be used: by customer service representatives to complete while on the phone with the cardholder company or government agency representative on behalf of a MasterCard corporate card cardholder Issuers use the completed forms for: supporting chargeback documentation for fraud and non-fraud related chargebacks instead of a written complaint generated on behalf of the cardholder 6

7 MASTERCARD RULES CHANGES CHIP LIABILITY SHIFT DELAYS FOR U.S. REGION AUTOMATED FUEL DISPENSER MERCHANTS MasterCard announced delayed U.S. region automated fuel dispenser (AFD) merchant participation in the counterfeit and lost/stolen/never-received-issue (NRI) fraud chip liability shifts for U.S. region domestic MasterCard and Maestro point-of-sale (POS) transactions. U.S. region AFD merchants Cards issued outside of the U.S. region 1 October 2017 Cards issued in the U.S. region 1 October

8 MASTERCARD RULES CHANGES REVISED STANDARDS FOR CHARGEBACK MESSAGE REASON CODES 4871, 4834, and 4831 Changes to Message Reason Code 4871 CVM List MasterCard will require issuers to provide the cardholder validation method (CVM) hierarchy within the documentation supporting this chargeback. The CVM list is unknown to the acquirer and is not detailed within data element (DE) 55 (ICC System Related Data). As such, it will be essential that the issuer demonstrate to the acquirer: For U.S. region acquired transactions, either offline PIN, online PIN, or both have a higher priority than signature for point-of-sale (POS) usage For U.S., Canada, and Europe region acquired transactions, offline PIN have a higher priority than signature for POS usage An issuer having only online PIN but not offline PIN prioritized higher than signature will continue to be unable to use message reason code 4871 when the transaction is acquired in either the Europe region or the Canada region MasterCard will verify the CVM list in the event the dispute reaches the arbitration process. 8

9 MASTERCARD RULES CHANGES CHANGES TO MESSAGE REASON CODES 4834 AND 4831 MasterCard will require issuers to provide documentation to support the alternate means of payment. This change will provide clear and concise information to the merchant in order for the merchant to provide either a valid rebuttal to the chargeback or acknowledge the validity of the chargeback and accept it. 1 Documentation supporting the chargeback includes (but is not limited to): 1 Cash receipts 2 Statements from other credit cards 3 The 23-digit Acquirer Reference Data (ARD) value, if the same 4 MasterCard was billed or detail showing a completed funds transfer 9

10 MASTERCARD RULES CHANGES ANNOUNCING CHIP/PIN LIABILITY SHIFTS FOR THE MIDDLE EAST/AFRICA REGION MasterCard announced that the Middle East/Africa region will adopt domestic and intraregional chip liability shifts and participate in the interregional chip liability shift for lost/stolen/never-received-issue (NRI) fraud (chip/pin liability shifts) for MasterCard point-of-sale (POS) transactions occurring on or after 1 July Under a lost/stolen/nri chip liability shift: The issuer assumes liability for lost, stolen, and NRI fraud transactions, unless a hybrid* PIN-preferring card is used at a POS terminal that is not a hybrid PIN-capable terminal The acquirer assumes liability for lost, stolen, and NRI fraud transactions, if a hybrid PIN-preferring card is used at a POS terminal that is not a hybrid PIN-capable terminal. *Hybrid means both magnetic stripe and chip functionality are supported. 10

11 MASTERCARD RULES CHANGES REVISED STANDARDS FOR ISSUER AND ACQUIRER HANDLING OF FRAUDULENT ACCOUNTS Effective 14 October 2016 MasterCard lowered the value of the Fraud Notification Service (FNS) counter that limits an issuer s ability to initiate a fraud-related chargeback from 25 to 15. After this date, issuers must relinquish their fraud chargeback rights on: Transactions authorized subsequent to the date of the second fraud chargeback on the account Transactions identified as fraudulent after 15 fraud-related chargebacks already have been initiated on an account. MasterCard will block any fraud-related chargebacks that exceed any of the FNS-related criteria. FNS Counter Exceeds 15 Fraud-Related Chargebacks An issuer must not use a fraud-related message reason code if submitted more than 15 chargebacks in aggregate involving the same account for message reason codes 4837, 4840, 4870, or Message reason code 4863 first chargebacks will be included in the FNS count once the FNS fraud chargeback count is two or greater. 11

12 MASTERCARD RULES CHANGES REVISED STANDARDS FOR CONTACTLESS CVM LIMIT AMOUNTS IN THE U.S. MasterCard is increasing the cardholder verification method (CVM) limit amount for transactions occurring at merchant locations in the United States. Effective for transactions occurring on or after 13 October The Quick Payment Service (QPS) CVM limit amount will remain at USD 50 Contactless transactions occurring at merchant locations in the United States USD 50 USD

13 VISA RULES CHANGES RULES RELATED TO TRANSACTION RECEIPTS WILL BE UPDATED Visa updated rules related to transaction receipts to help simplify merchant / acquirer operations and reduce costs associated with transaction receipt storage and fulfillment. Providing Receipts to Cardholders Merchants must provide cardholders with a receipt only in the following circumstances: Transactions initiated by the merchant without reference to the cardholder, such as recurring and installment transactions When the receipt is required to make a refund, or when there are restrictive conditions of sale In all other transactions, when the cardholder requests it Merchants must make a paper receipt available to a cardholder, but may provide an electronic receipt at cardholder request. Request for Copy An issuer may continue to initiate an RFC of a receipt for any transaction. The acquirer must fulfill the RFC within 30 days by sending the issuer a copy of the receipt bearing signature, if: The RFC occurred within 120 days of the processing date of the transaction AND The transaction occurred in the face-to-face environment and required a signature 13

14 VISA RULES CHANGES Fulfill the RFC with a copy of the receipt Merchant and/or acquirer may choose to Include other relevant information in the fulfillment (such as a car rental contract) Send a non-fulfillment message Merchant Receipt Retention required period to retain receipts from 13 months to 120 days for transactions that require a fulfillment. 14

15 VISA RULES CHANGES CARDHOLDER LETTER - SECURE ONLINE BANKING REQUIREMENTS Visa reminds issuers that for chargebacks that require a cardholder letter, a certification on behalf of the cardholder may be provided when a document containing all of the following is obtained: Cardholder s complete or partial account number. Merchant name(s) Transaction amount The unique identity (5). To avoid confusion, issuers should highlight the location of the unique identity on the document Issuer certification that the unique identity represents the cardholder s signature (5) Any method the cardholder uses to establish a unique identity, whether through via a password and/or another login identification method, is considered a valid representation of the cardholder signature. 15

16 VISA RULES CHANGES ATM EMV LIABILITY SHIFT TIMELINE FOR INDONESIA REMAINS DEFERRED In response to a regulatory directive from Bank Indonesia, the central bank in Indonesia, Visa announced that it would defer Indonesia s participation in the EMV liability shift. Visa continues to work with Bank Indonesia to determine new dates for the ATM EMV liability shift. As soon as these dates are confirmed, Visa will incorporate them into the Visa Rules. Indonesia remains excluded from ATM EMV liability shift participation, issuers in all Visa regions cannot charge back fraudulent counterfeit ATM transactions. 16

17 VISA RULES CHANGES NEW TERMS, IDENTIFIERS AND UPDATED RULES FOR CREDENTIAL-ON-FILE TRANSACTIONS To increase transparency, consistency and approval rates for transactions using stored payment credentials Visa introduced new identifiers and terms and update associated rules, including those related to merchant disclosures and some authorization processing requirements. New Stored Credential Transaction Category The term Stored Credential applies to all COF transaction types, including: Recurring Installment Unscheduled COF (New)1 Cardholder-initiated COF2 1 Merchant-initiated transaction that uses a stored credential and does not occur on a fixed schedule. Transactions previously indicated as recur that do not occur on a fixed schedule will now be classified as Unscheduled COF transactions. Merchant Disclosure Requirements Effective 14 October 2017, Visa is updating and expanding existing rules related to merchant disclosure requirements. Merchants and third party agents that offer cardholders the option to store their credentials on file must: Obtain cardholders consent to store the credential Disclose to cardholders how those credentials will be used Notify cardholders when any changes are made to the terms of use 2These are transactions initiated by the cardholder using stored credentials so the cardholder does not need to re-enter card details. 17

18 AMERICAN EXPRESS RULES CHANGES ONLINE ORDER/IN-STORE PICK-UP TRANSACTION PROCESSING The Cardmember experience is moving toward a seamless approach through all available shopping channels involving physical establishments as well as digital channels; this includes online order/in-store pick-up Transactions. As a result, Card Transactions increasingly share elements from both Card Present and Card Not Present environments. American Express has developed policies to address online order/in-store pick-up Transaction processing. This update will: Promote the adoption of SafeKey as a more secure option for online Transactions Increase awareness of the importance of implementing fraud mitigation measures for in-store merchandise pick-up 18

19 AMERICAN EXPRESS RULES CHANGES CHAPTER 4 - S/E AND ATM STANDARDS Internet S/E Card Acceptance Requirements: When conducting Transactions over the Internet, S/Es: Must use the appropriate Point of Service Data Code indicating the Transaction was processed via the Internet. Must electronically authorize and electronically submit all Internet Transactions. All Internet sales must have a zero floor limit. Note: Internet Charges made with Chip Cards through a Chip-Enabled Device are considered to be Card Present Transactions Online Order/In-Store Pick-up Transaction Processing: Transactions involving Internet orders for Goods scheduled to be picked up at a designated physical store, are authorized and paid for in-store, prior to the Goods being picked up, are considered Card Present Transactions. Internet Transactions conducted via online order, where the Goods are later picked up in-store, may be authorized using SafeKey. Goods and Services Not Received: ISO Code has been modified by adding authorized third party-related compelling evidence to the Acquirer s Second Presentment responsibilities. 19

20 AMERICAN EXPRESS RULES CHANGES DISPUTE MODIFICATION FOR AEIPS PIN TRANSACTIONS This policy extends the existing Chargeback protection by restricting the Issuer's ability to transfer liability in the event the Acquirer doesn't fulfill or partially fulfills a Retrieval Request submitted under Retrieval Request Message Reason Code Legal Request or Fraud Analysis. For AEIPS PIN Transactions, the following dispute restrictions apply: Impact to Acquirers: No longer liable for Chargeback ISO Code Request for Support Not Fulfilled if the Acquirer does not fulfill a Retrieval Request Message Reason Code Legal Request or Fraud Analysis No longer liable for Chargeback ISO Code Request for Support Illegible/Incomplete if the Acquirer partially fulfills a Retrieval Request Message Reason Code Legal Request or Fraud Analysis Impact to Issuers: No longer allowed to submit Chargeback ISO Code Request for Support Not Fulfilled if the Acquirer does not fulfill a Retrieval Request Message Reason Code Legal Request or Fraud Analysis. No longer allowed to submit Chargeback ISO Code Request for Support Illegible/Incomplete if the Acquirer partially fulfills a Retrieval Request Message Reason Code Legal Request or Fraud Analysis. 20

21 AMERICAN EXPRESS RULES CHANGES ISO Request for Support Not Fulfilled : Excluded Transactions : Transactions where the Retrieval Request was initiated using Reason Code 6016 Cardmember needs for personal records Transactions that qualify under the No Signature/No PIN Program Expresspay, Expresspay Mobile, or Digital Wallet Contactless-initiated Transactions, where the Transaction amount is less than or equal to the market threshold for Expresspay Transactions as indicated in Exhibit 6 NoSignature/No PIN Program Thresholds. AEIPS PIN, Digital Wallet Contactless-initiated and Digital Wallet Application-initiated transactions where the Retrieval Request was initiated using Reason Code Legal Request or Fraud Analysis. 21

22 AMERICAN EXPRESS RULES CHANGES ISO Request for Support Illegible/Incomplete Excluded Transactions: Any Transaction with the RR Message Reason Code 6008 Cardmember requests copy bearing signature with one of the following Transaction types: Card Not Present Charges Aggregated Transactions No Show Reservations Program Advance Deposit or Payment Program Transactions with the RR Reason Code 6016 Cardmember needs for personal records A Final Chargeback where a Retrieval Request was not requested for the disputed Transactions A Final Chargeback where the requested Documentation was provided in the Second Presentment Transactions that qualify under the No Signature/No PIN Program Expresspay, Expresspay Mobile, or Digital Wallet Contactless-initiated Transactions, where the Transaction amount is less than or equal to the market threshold for Expresspay Transactions AEIPS PIN, Digital Wallet Contactless-initiated and Digital Wallet Application-initiated transactions with the Retrieval Request Reason Code Legal Request or Fraud Analysis 22

23 CONTACT Sara Novakovič Chargeback specialist Dispute operations department

24 THANK YOU! Any questions? 24