MasterCard Network Information

Summary of Changes 

Spring Release 2012 

Effective April 13, 2012, MasterCard will introduce the following interchange rate changes.

MasterCard Interchange Program	New Rate
Commercial Data Rate II Corporate	2.10% +$ 0.10
Commercial Data Rate II Purchasing	2.10% + $0.10
Commercial Data Rate III Corporate	1.90% + $0.10
Commercial Data Rate III Purchasing	1.90% + $0.10
Commercial Face- to-Face Corporate	2.10% + $0.10
Commercial Face- to-Face Purchasing	2.10% + $0.10
Commercial Large Ticket  I Corporate	1.35% + $40.00
Commercial Large Ticket  I Purchasing	1.35% + $40.00
Commercial Large Ticket  II Corporate	1.35% + $40.00
Commercial Large Ticket  II Purchasing	1.35% + $40.00
Commercial Large Ticket  III Corporate	1.35% + $40.00
Commercial Large Ticket  III Purchasing	1.35% + $40.00
Commercial T&E Rate I Corporate	2.50% + $0.00
Commercial T&E Rate I Purchasing	2.65% + $0.00
Commercial T&E Rate II Corporate	2.35% + $0.10
Commercial T&E Rate II Purchasing	2.50% + $0.10
Commercial T&E Rate III Corporate	2.30% + $0.10
Commercial T&E Rate III Purchasing	2.45% + $0.10

Revised Standards for Chargeback Processing

• Effective April 14, 2012, MasterCard is introducing “Compelling Evidence” as a way to remedy chargeback reason code 4837 “No Cardholder Authorization” when the  transaction was processed as eCommerce or Mail Order/Telephone Order
• The following forms of documentation would be considered “ Compelling Evidence” that the cardholder participated in the transaction:
  • Receipt; work order; of other document signed by the cardholder, substantiating that the cardholder received the goods or services
  • Cardholder confirmation of registration to receive electronic delivery of goods or services
  • Letters, e-mails, faxes, or other written correspondence exchange between the merchant and the cardholder

MasterCard E-Commerce Card-not-Present Fraud Alerts

• MasterCard announced that Acquirers/Merchants will be mandated to decline previously authorized E-Commerce, Card-not-Present (CPN) transactions when they have reason to believe that the transaction is fraudulent
• As a result of this mandate Acquirers/Merchants must determine whether or not to process an E-Commerce (CPN) transaction believed to be fraudulent within 72 hours of the original authorization request
• Disclose to the cardholder where possible that the transaction cannot be completed

Authorization Precision Initiative – Travel and Entertainment Processing

• MasterCard is announcing new global processing standards for Travel and Entertainment merchants.  These standards will assist in mitigating the current challenges of excessive holds being placed on cardholder’s accounts
• MasterCard is providing acquirers and issuers with the necessary system capabilities to allow them to reflect the true cardholder’s open to buy in the following Travel and Entertainment merchant categories

• 3351-3441 – Car Rental Agencies
• 3501-3999 – Lodging – Hotels, Motels, Resorts
• 4411 – Cruise Lines
• 7011 – Lodging – Hotels, Motels, Resorts – not elsewhere classified
• 7512 – Automobile Rental Agency – not elsewhere classified
• Additionally, the reversal mandate effective in the U.S. region will be expanded, effective October 2012, to include the Travel and Entertainment merchant categories above in conjunction with these new processing standards.
• A merchant must ensure that for any approved authorized amount that will not be included in a settlement, the merchant would need to provide a full or partial reversal within:
  • 24 hours of the original authorization request in a card-present environment
  • 72 hours of the original authorization request in a card-not-present environment

• Changes are being made so that incremental authorizations can be used as a way of addressing this issue.  Each incremental authorization associated with a single cardholder transaction must reference the original authorization number
• Although MasterCard has announced these changes as part of the April 2012 Compliance Release, these changes will not be mandated until October 2012

Additional information will be provided as it becomes available

 

Fall Release 2011 

Chargeback Documentation Elimination

Effective for new chargebacks initiated on or after July 1, 2011, MasterCard eliminated the Issuer's documentation requirements for the following chargebacks:

• 35 - Card Not Valid or Expired (fraud -related disputes only)
• 37 - No Cardholder Authorization
• 40 - Fraudulent Processing of Transactions
• 47 - Requested/Required Authorization not Obtained and Fraudulent Transaction
• 57 - Card Activated Telephone Transactions ( fraud-related disputes only)
• 62 - Counterfeit Transaction Magnetic Stripe POS Fraud
• 63 - Cardholder Does Not Recognize - Potential Fraud (arbitration chargeback RS2 or RS3 only)
• 70 - CHIP Liability Shift

Currently, MasterCard requires that these chargebacks be supported with either a fraud affidavit and/or a cardholder letter. With this change, fraud affidavits and /or cardholder letters will no longer be required.

As a result of this change, a cardholder letter may no longer accompany these disputes. The information pertaining to the dispute will be contained within the new MasterCard Expedited Dispute Form, which is provided when applicable along with the Chargeback Notification.

Revised Standards for US Intraregional SecureCode Merchant-Only Liability Shift

Effective for new chargebacks processed on or after October 15, 2011, MasterCard will expand the SecureCode protection to include both attempted as well as fully authenticated U.S. intraregional ( both merchant and card issued within the U.S.) transactions. This will be referred to as Merchant -Only UCAF and the liability for fraud will shift from the merchant to the issuer.

• Chargeback protection will apply to the following chargeback reason codes.
37 - No Cardholder Authorization
63 - Cardholder Does Not Recognize/Potential Fraud

Note that all proper SecureCode/UCAF indicators as well as the required eCommerce indicator must be submitted within the authorization and clearing transactions in order to receive the chargeback protection. Commercial Card transactions are not eligible for this protection and are excluded as they are today.

Revised Standards for Counterfeit Goods Disputes

Effective for new chargeback’s processed on or after October 15, 2011, MasterCard will revise chargeback processing procedures to address the purchase of goods alleged to infringe on intellectual property rights ( "counterfeit goods ") under reason code 53 "Cardholder Dispute-Defective/Not as Described"
Issuers may utilize reason code 53 "Cardholder Dispute-Defective/Not as Described " if the cardholder engaged in the transaction and believing they were purchasing genuine goods and once received the goods were determined to be counterfeit. In order to remedy the dispute, documentation showing the goods were not counterfeit will need to be provided.

Revised Standards for Chargeback Reason Code 50 "Credit Posted as a Purchase"

Effective October 15, 2011 and continuing through April 12, 2012, MasterCard will begin the consolidation of chargeback reason code 50 "Credit Posted as a Purchase" and will require issuers to utilize chargeback reason code 60 "Credit Not Processed" for all credit related disputes for all regions with the exception of Brazil Domestic Installment Payment Transactions (Issuer and Merchant located in Brazil)
These changes will be implemented as follows:
• October 15, 2011 - Issuers may start using chargeback reason code 60 "Credit Not Processed" for first chargeback’s related to credit disputes, which will include "Credit Posted as a Purchase"
• April 13, 2012 - MasterCard will retire chargeback reason code 50 "Credit Posted as a Purchase" and will no longer allow the issuer to utilize this reason code for first chargeback’s for credit related disputes.

MasterCard Authorization Data Accuracy Initiative

MasterCard announced a new authorization data accuracy initiative which will address the data integrity of the following fields;
• Transmission Date and Time - This field must contain the date and time that the authorization message is processed by the MasterCard Network
• Card Acceptor Terminal ID - This field must contain the unique terminal ID when the merchant location has multiple terminals. Currently this information is omitted or only default information is provided
• POS Postal Code - This field must contain the postal code of the merchant's location in countries that have a postal code
• Trace ID - This field must contain the information populated by MasterCard when the authorization response is returned
• Approval Code - This field must contain the value returned in the authorization response

Monitoring will begin in conjunction with the Fall 2011 release on October 14, 2011, with enforcement beginning with the Spring 2012 Release on April 13, 2012.

Spring Release 2011

Account Status Inquiry Service Fee

• Effective June 14, 2011, MasterCard is implementing functionality to support a new Account Status Inquiry Service transaction that will allow merchants to send Account Status Inquiry transactions to validate aspects of a cardholder account.
• Account Status Inquiry Service transactions may include requests for Address Verification Service (AVS), CVC2 validation or both.
• As a result of this change AVS only transactions will be discontinued.
• Additionally, a status check request with an amount greater than zero dollars will become prohibited with the exception of Automated Fuel Dispenser (AFD) merchants.(MCC 5542)
• The fee that will be assessed for these transactions is $0.025 for US issued Cards and $0.03 for Non US issued cards
• The descriptor that you will see for these transactions is:
MC US ACCT STATUS INQ SVC INTERREGIONAL (US Merchant/Non US Issuer)
MC US ACCT STATUS INQ SVC INTRAREGIONAL (US Merchant/US Issuer)
• This fee can be avoided by obtaining an authorization request for the full amount of the sale.

New MasterCard Fleet Card Edit

Effective April 15, 2011 MasterCard will implement an edit that will require the Fleet Card ID/Driver Number or Vehicle Number submitted in the authorization request match the same data submitted for settlement for MasterCard Fleet Cards. If the authorization and settlement data do not match, the transaction will be downgraded to Data Rate I.

This edit is applicable to the following merchant types:

• 4468 - Marinas
• 5541 - Service Stations
• 5499 - Convenience Stores
• 5983 - Fuel Dealers
• 7511 - Truck Stops

• Reversal Mandate Enhancements - MasterCard Processing Integrity Fee

Effective June 14, 2011, MasterCard is expanding the existing authorization reversal mandate to include all MasterCard branded transactions (Credit and Debit including prepaid) for all Merchant Category Codes (MCC) except for the following Travel and Entertainment (T&E) MCC's:

• 3351-3441 - Car Rental Agencies
• 3501-3999 - Lodging - Hotels, Motels, Resorts
• 4411 - Cruise Lines
• 7011 - Lodging - Hotels, Motels, Resorts - not elsewhere classified
• 7512 - Automobile Rental Agency - not elsewhere classified

This mandate requires merchants to submit an authorization reversal when an authorization was obtained and is either not needed or the final amount is less than the authorized amount. Authorizations must be electronically reversed within 24 hours for face to face authorizations and reversed within 72 hours for Card absent authorization requests.

Failure to comply with the above requirement will result in the MasterCard Processing Integrity fee of $0.055 being assessed to authorization requests that are not properly handled.

Interregional Consumer Super Premium Interchange Program

Effective April 15, 2011, MasterCard is introducing the following interchange programs.

Super Tier Interchange

Effective April 15, 2011, MasterCard is introducing two new interchange programs to support the Commercial Card transactions at Supermarkets which meet specific volume requirements.

• Commercial Supermarket
• Business Enhancement Value Supermarket

MasterCard has not yet announced the volume requirements or rates for this program

Changes to the Travel Industries Premier Services (TIPS) program

MasterCard is restructuring the existing Travel Industries Premier Service (TIPS) program.
• Any Car Rental, Hotel or Cruise merchant may qualify for the TIPS interchange program
• Travel and entertainment (T&E) merchants no longer have to register with MasterCard and the Program Registration ID of "PAA" will no longer be required in the clearing message to qualify
• Car Rentals, Hotel and Cruise merchants will no longer be eligible for Merit III, Merchant UCAF or Full UCAF interchange programs

MasterCard®

Partial Approval Processing Enhancements

Effective April 15, 2011, MasterCard will allow issuers to provide a partial approval response that is less than or equal to the requested authorization amount. Today, a partial approval response is only provided for an amount less than the requested authorization amount. With this enhancement the issuer has the ability to approve the amount that was authorized and prevent the ability to add any additional amounts to the transaction, such as tips. If a tip needs to be added to the transaction amount, another form of payment will need to be requested.

Merchants will have chargeback liability for any amount submitted into clearing above the partially approved amount.

Revised Standards for Issuer Handling of Fraudulent Accounts

Effective with new chargebacks processed on or after April 16, 2011, MasterCard will require the Issuer to close an account before initiating the following chargebacks.
• 37 - No Cardholder Authorization
• 40 - Fraudulent Processing of Transaction
• 47 - Requested/Required Authorization not Obtained and Fraudulent Transaction
• 62 - Counterfeit Transaction Magnetic Stripe POS Fraud
• 63 - Cardholder Does not Recognize/Potential Fraud (RS2 or RS3 only)
• 70 - Chip Liability Shift
• 71 - Chip /PIN Liability Shift
As a result an Issuer will lose the right to chargeback under the reason codes indicated above for transactions that are authorized after the date of the second fraud chargeback on the same account.

This change should address concerns or repeat fraud situations where subsequent losses could have been avoided if the account had been closed and/or fraud reported by the Issuer promptly.

MasterCard Authorization Data Accuracy Initiative

MasterCard announced a new authorization data accuracy initiative which will address the data integrity of the following fields:

• Transmission Date and Time - This field must contain the date and time that the authorization message is processed by the MasterCard Network
• Card Acceptor Terminal ID - This field must contain the unique terminal ID when the merchant location has multiple terminals. Currently this information is omitted or only default information is provided
• POS Postal Code - This field must contain the postal code of the merchant's location in countries that have a postal code
• Trace ID - This field must contain the information populated by MasterCard when the authorization response is returned
• Approval Code - This field must contain the value returned in the authorization response
Monitoring will begin in conjunction with the Fall 2011 release on October 14, 2011, with enforcement beginning with the Spring 2012 Release on April 13, 2012.

 

MasterCard Rule Changes

MasterCard Merchant Communication

Notice of MasterCard Rules Changes
As a result of the consent decree and final judgment that was entered between MasterCard and the Department of Justice, MasterCard agreed to modify Rule 5.11.1 "Discrimination" in the United States as follows:

A Merchant may request or encourage a customer to use a payment card with an acceptance brand other than MasterCard or other form of payment or a Card of a different product type (e.g., traditional cards, premium cards, rewards cards) than the Card the consumer initially presents. A merchant may do so by methods that include, but are not limited to:

• Offering the customer an immediate discount from the Merchant's list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the customer uses a particular payment card with an acceptance brand other than MasterCard or other particular form of payment;

• Offering the customer an immediate discount from the Merchant's list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the customer, who initially presents a MasterCard, uses instead another payment card or another form of payment;

• Expressing a preference for the use of a particular payment card or form of payment;

• Promoting the use of a particular general purpose payment card with an acceptance brand other than MasterCard or the use of a particular form or forms of payment through posted information, through the size, prominence, or sequencing of payment choices, or through other communications to customers (provided that merchants will abide by the MasterCard trademark standards relating to the display of its marks); or

• Communicating to customers the reasonably estimated or actual costs incurred by the Merchant when a customer uses particular payment cards or forms of payment or the relative costs of using different general purpose payment cards or forms of payment.

Consistent with the modified rule, merchants are free to engage in the POS practices that are described above, or any other substantially equivalent practices. Acquirers are prohibited from adopting or enforcing rules or agreements with respect to U.S. merchants that are contrary to the foregoing rules. Electronic copies of the MasterCard final judgment can be found can be found at www.justice.gov/atr/cases/f273100/273170.pdf