isa offers a credit card that is tailored to the needs of businesses. Visa Corporate is a commercial credit card that features spending data reports, employee convenience, and benefits like Auto Rental Collision Damage Waivers, Travel and Emergency Assistance Services, and Cardholder Inquiry Service. Commercial cards are popular with businesses primarily because it enables companies to analyze how much employees are spending and where they are spending corporate funds in detail.

A “card-not-present” transaction is a transaction that is either keyed in or done online—that is, not run through a terminal. These types of transactions have higher interchange rates because there is a higher risk of fraud.

The interchange rate for this type of transaction is 2.70% and $0.10. To find out more about Visa’s interchange rates, read up here.

Mastercard also offers a Corporate Card. This card also comes with a range of useful commercial services and savings programs,like integrated travel and booking management, expense management and reporting, and card controls; and benefits like emergency card replacement, car rental insurance, and purchase assurance. However, there is no specific rate for commercial card-not-present transactions.

s a business owner, your first priority should be keeping as much profit as you can, and that includes minimizing the number of chargebacks you experience. Chargebacks can not only eat into your profits, they can also throw suspicion onto your reputation with your payment processor. A chargeback reversal is what happens if you win the second presentment (sometimes called “re-presentment”) part of the chargeback dispute process.

Chargeback reversals will help your business, but it can be hard to prove your case. Further, many merchants choose not to dispute chargebacks at all after considering the amount of time and cost associated with going through the dispute process. You can learn more about chargeback arbitration here. If you do choose to dispute a chargeback, here are some tips for achieving a chargeback reversal:

You can learn more about Visa’s Chargeback Resolutions process here, MasterCard’s here, Discover’s here, and American Express’s here. Once you understand the resolutions process for the card network you are dealing with, it will be easier to understand exactly what you need to win a reversal.

Does your business receive more than its fair share of chargebacks?

Credit card associations are paying attention. Most card associations monitor merchant activity on a monthly basis. They keep tabs on everything from chargeback ratios, to disputes and fraudulent transactions.

Merchants are expected to keep disputes and fraud at acceptable levels. If your business receives excessive chargebacks, you could land on the chargeback monitoring program.

Here’s What Happens if Your Business is Placed in the Monitoring Program

If you exceed the threshold set by the card network, you will be placed on a monitoring program. In most cases, you will receive a warning before being placed in the program.

Businesses who receive a warning must take immediate action in reducing chargeback ratios.

Here are a few ways you can prevent chargebacks:

Chargeback Prevention Tips that Work

• Process credit immediately
• Keep customers informed about when they will receive a refund
• Share the return or exchange policy before completing the checkout process
• Obtain the customer’s signature for items picked up in store, work orders, etc
• Bill customers after products are shipped or service provided

In the event that your business is placed in the program, you may be required to pay monthly fines and additional fees until your level of fraud and disputes have gone down.

You’re going to want to take an active role in reducing your levels of fraud and disputes. Work with your acquirer to develop a strategy to reduce your chargeback levels – or what is also called a chargeback mitigation plan.

Need Help Creating a Chargeback Mitigation Plan?

If you want specialized help in preventing chargebacks, reducing your chargeback levels or creating a chargeback mitigation plan (required if you have received a warning), then get in touch with us so we can help you successfully navigate chargebacks and chargeback disputes.

‍

Visa

Discontinue Support of the Performance Tier 2 Program—Canada Region

Visa will no longer support the Performance Tier 2 interchange program for merchants in the Canada region. Although these programs will still be visible throughout the systems, no volume will report to these programs.

‍

Discontinue Support of Non-CPS Consumer Credit Interchange Programs

Visa will no longer assign the Electronic and Standard interchange programs to transactions. Although these programs will be visible throughout the systems, no volume will report to these programs.

‍

Discontinue Support of Supermarket Credit Tier Interchange Programs

Visa will no longer assign the Supermarket Performance Threshold programs. Although these programs will be visible throughout the systems, no volume will report to these programs.

‍

Discontinue Support of Business Credit Interchange Programs

Visa will no longer assign the Business Standard fee programs for travel service and non-travel service transactions that do not meet Custom Payment Service (CPS) qualification. Although these programs will be visible throughout the systems, no volume will report to these programs.

‍

Mastercard

Enhancements to Intracountry Interchange Programs in the Canada Region

Mastercard is enhancing the Canada domestic interchange programs by lifecycling the existing consumer credit programs and creating new ones. They are also restructuring the commercial programs by setting them up as Small Medium Enterprise, Large Market, and World Elite for Business.

‍

Transaction Integrity Class for Interchange Rates in the U.S. Region

The Transaction Integrity Class (TIC) is used as a method of evaluating transactions to determine their class as some transactions are inherently more secure than others. It encompasses the fundamental safety and security of a transaction and considers the differences between the technology used and the Cardholder Verification Method (CVM) used to assess the validity of both the card and the cardholder to determine the overall integrity of the transaction.

Mastercard currently provides the TIC value in the authorization for point-of-sale (POS) purchase and purchase with cash back for most transactions initiated in the U.S. region. Mastercard requires the TIC field to be part of the authorization response (as of April 2016). TSYS Acquiring Solutions already supports the TIC throughout our authorization and clearing processing platforms.

Effective April 17, 2020, Mastercard will require the TIC to be present on clearing messages and will be including it in their interchange edits. When an invalid TIC is provided by merchants or acquirers for a U.S. domestic transaction, the transaction will be rejected by Mastercard with error message 2819. At this time, approximately 50 percent of all Mastercard volume processed on our clearing platform does not include the TIC.

Electronic Commerce Security Level Indicators for the Mastercard Identity Check Program

Mastercard has updated electronic commerce security level indicators (ECSLI) values for the Mastercard Identity Check Program. This includes a new security level indicator (SLI) value for the EMV 3-D Secure (3DS) specification.

American Express

New Amex Error Messages

Amex will implement new error messages for 2077 and 2078. TSYS Acquiring Solutions will update MAS, PPM, and e-Connections to support the new error messages.

‍

Country Code and Country Name Changes

Amex will revise a country code and a country name to match ISO standards.

‍

hat is Chargeback Arbitration?

When a bank, cardholder or merchant can’t resolve a dispute on their own, you may advance along the process to the chargeback arbitration stage. During this stage, a card representative will review your case and make a final judgement.

How Does Chargeback Arbitration Work?

Chargebacks give cardholders the right to dispute transactions.

What happens if you don’t agree with a chargeback?

In the event that you want to dispute a chargeback, you can challenge it through a process called representment.

Just like a court case, you will be required to provide evidence to counter the chargeback during representment. Without sufficient or strong enough evidence, the cardholder’s issuing bank may reject your case and file a second chargeback, otherwise known as a pre-arbitration chargeback.

What happens if you don’t want to accept the second chargeback?

You do have the option to appeal a second chargeback and an arbitrator from the card network will review your case. The cardholder must accept or deny the motion for arbitration. If the cardholder accepts, the case goes into arbitration for a final decision.

It’s important to know that if a dispute makes it to the arbitration stage, it’s likely that the outcome won’t be favorable for you as a merchant.

How to Prevent Chargeback Arbitration

A chargeback arbitration prolongs the dispute which means you will incur additional fees and time spent on your dispute.

Chargeback arbitrations should be avoided and should only be looked at as a last resort. To avoid chargeback arbitration, it’s recommended that you avoid chargebacks altogether.

Need Expert Help?

We can help you identify chargeback prevention strategies for your business so that you can minimize your risk. For more information, get in touch with us here.

If your business depends primarily on online orders,then perhaps you’ve come across the acronym AVS. AVS stands for “AddressVerification System” and it is a fraud prevention tool used to verify thebilling address provided by the customer with the address on file with thecredit card issuing bank. AVS checks the numeric portions of the address—likestreet number and zip code—in order to return a verification. Sometimes thisresults in false positives or negatives which may result in having to do amanual override, but overall it is a good means of preventing fraud.

Additionally, making sure to use AVS can also affectyour interchange rate! Credit card companies like to see merchants taking theinitiative to protect against fraud, and merchants who capture AVS data canreceive lower interchange rates. Overall, it is a good idea to institute apolicy of AVS, especially if you’re a merchant that relies on card-not-presenttransactions.

The codes for AVS are alphabetical, and some are cardbrand-specific. The codes are:

‍

An interchange rate is the rate a card network charges to cover the risk of doing business. All credit transactions involve risk because no physical currency is being exchanged, and an interchange rate is calculated to mitigate that risk incurred from fraud and the threat of the card network not being paid back by the cardholder as much as possible. Interchange rates are paid whenever a merchant processes a transaction and is usually presented in the form of a percent plus a few cents per transaction. Interchange rates are not regulated by any government entity, so they are set by the card networks themselves.

These interchange rates do change, twice a year in fact, and are generally released in April and October. This is because the payment processing industry is always evolving, and card networks have to keep up with spending trends. The rates don’t always increase, sometimes they decrease or remain the same, depending on several factors the card network considers and their judgement of the market.

The factors that go into the decision to adapt interchange rates include the risk of fraud, the rewards card networks offer cardholders, the cost of the transaction, and the industry in which the purchase is being made (example: a concert ticket is high risk, so it would have a higher rate than, say, a low-risk purchase of a meal at a restaurant). Payment processors add their own markup to cover their own risk of doing business.

Visa and MasterCard’s interchange rates are available to the public, without processor markup, so you can always stay up to date and informed when choosing your payment processor. Visa’s rates can be found here and MasterCard’s are here. To help merchants keep more of the money they earn so their business can grow, PayArc offers one of the best deals in the industry for low-risk businesses, so contact us today to find out if your business qualifies!

ncryption & PCI Compliance

Surely you’ve heard about skimmers being placed on gas station pumps or similar, of criminals trying to capture credit card information. PCI-compliance helps merchants avoid potentially dangerous situations like these. Staying PCI-compliant should be a primary concern for any merchant. Security breaches can spell disaster for businesses large and small, as recent headlines have made clear. For that reason, card networks expect merchants to comply with the PCI-DSS to keep everyone from cardholders to the card networks themselves safe from fraud.

Encryption is one such way to keep cardholder data safe. The practice of encryption is a great security measure because…

• The practice helps keep merchants PCI-compliant
• Encryption makes it much harder for cybercriminals to steal data, protecting cardholder, merchants, processors, and card networks from fraud
• Encrypted data requires a decryption key to access, so until the encryption is unlocked the data is safe

How Encryption Works

Like tokenization, encryption converts the card data into an indecipherable code. However, unlike tokenization, the encrypted data but be decrypted (using a randomized decryption key) in order to be used. While a token can be used as is, encrypted data must be “unlocked” to be usable. Only authorized users have the decryption keys necessary to read the data, and these keys change often to guard user data.

While the magnetic stripe on the back of a credit card is encrypted, it is fallible to skimmers. An EMV chip also contains encrypted information, and each transaction is encoded differently, making it safer. EMV (Europay/MasterCard/Visa) chips were introduced in the U.S. around 2014, after several hacks of big-name retailers made consumers wary of credit card transactions.

PayArc and Encryption

PayArc offers an encryption service as part of our PCI-compliance program for merchants. This program is made possible through our partnership with ControlScan, a leading IT security service. PayArc and ControlScan are dedicated to the protection of your customers’ card data, and we will help you every step of the way to make sure that goal is met.

Usually, when a merchant account is terminated, the merchant’s name and business is listed on MATCH—Member Alert to Control High Risk. Ending up on MATCH is the nightmare of legitimate merchants. This is because finding an individual’s name on MATCH means that most processors will not approve a different merchant account with the same owner due to the higher risk of potential for fraud.

What is MATCH/TMF?

MATCH (previously known as TMF, or Terminated Merchant File), is a database of merchants used by payment processing companies that contains information on merchants and individuals whose accounts have been terminated. Payment processors check MATCH for each new potential account to mitigate their own risk and keep their business safe. Once a merchant or individual is on MATCH, it is very difficult to be removed and very unlikely that another merchant account will be approved for processing.

Why Would A Merchant Account Be Terminated?

There are several reasons as to why a merchant account would be terminated:

Placing a merchant or an individual on MATCH is not a decision that an acquiring bank or payment processor makes lightly, so if you’re not committing fraud you are probably safe. MasterCard and Visa both have penalties in place for acquiring banks and payment processors who not comply with their regulations—both for placing merchants on MATCH and for failing to do so. However, mistakes do happen, and if you believe that you have been placed on MATCH in error be sure to speak with an attorney who has experience in the credit card industry.

In the age of online shopping, credit card brands have had to get serious about security. One solution they’ve rolled out is the CVV-–the Card Verification Value. You’ve probably used this feature as a customer yourself! This is a 3-digit number on the back of the card that is used to prevent fraud in the case of online orders (Note: American Express cards have a four-digit code on the front of the card instead). This code is entered onto the checkout page on the website and authorizes the transaction.

What Is CVV2?

CVV2 is just CVV, although is refers explicitly to the three digits on the back of the card which was developed for online usage of the card. The original CVV is encoded into the magnetic stripe. Similarly, Discover and American Express use the acronym CID –Card Identification Number, but the intent is the same as the CVV.  

How Does the CVV Protect Against Fraud?

When companies have their data compromised, customer card information can end up on the “Dark Web” where criminals can then buy the information. CVV offers an extra layer of security that is meant to protect against fraud where the card thief purchases the card number online, and because they are not in physical possession of the card and they cannot know the CVV number.