Business Impacts

Merchant portfolios may need be reviewed to prepare profitability models that support these interchange rate changes.

Mastercard

Canada Region

Enhancements to Interregional Interchange Programs

Mastercard is enhancing interregional interchange programs for the Canada region and is reclassifying consumer credit product code MSP-Muse Mastercard to Consumer Super Premium, in addition to expanding Canada acquiring to consumer Super Premium products.

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US Region

New Consumer Debit Product Code

Mastercard is introducing a new consumer debit product code, MCI-Mastercard Select Debit,in the Debit Mastercard (DMC) acceptance brand for the U.S. region and will be adding this new product code to existing interchange programs.

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Expanded Use of Existing Consumer Debit Product Code ACS

Mastercard is expanding the use of existing consumer debit product code ACS-Digital Debit to existing interchange programs where product code MDS-Debit Mastercard Standard exists.

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New Mastercard Enterprise Solution Wholesale Travel Program Product Codes

 

Mastercard is expanding the Wholesale Travel Program by introducing 5 new commercial B2B credit product codes. These new B2B product codes will be added to existing interchange programs. The existing Wholesale Travel Program is being renamed to support the changes as Mastercard B2B Product.

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Discover

New Card Product Type for the Commercial Prepaid-Reloadable for the IIN Range

Discover will implement a new Product Type value, 015, for the Commercial Prepaid-Reloadable for the Issuer Identification Number (IIN) range.

he Next Level in Preventing Credit Card Fraud

In recent years, new headlines involving security breaches of big companies like Target and Uber have placed the methods by which the payments industry protects consumer data under public scrutiny. Merchants and processors have the responsibility to keep cardholder information safe, although it is increasingly hard to do so in today’s world. Enter card tokenization: the next step in protecting customer data and keeping merchant reputations safe. Customers who use mobile wallets already get the extra protection of this technology—making mobile wallets the most secure form of electronic payment.

Card tokenization is a great security measure because…

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What Is A Token and How Does It Work?

A token is a series of randomly generated numbers (or numbers and alphabetic characters, depending on the type of tokenization program). This string of random characters replaces a customer’s actual card data. Then, the customer’s data can be stored and used just as if it were the actual card, however, the token has no value outside of the payment acceptance system and makes no sense to a potential card thief. This means that if there is ever a breach in security, the tokens are unusable to cyber criminals.

PayArc and Card Tokenization

PayArc’s risk management program provides merchants with the option to tokenize their customers’ data, among other security measures. Once the card data is entered into the payment system through any method of payment, that data is tokenized. This works for both card-present and card-not-present transactions. This means that we can give both merchants and customers much-needed peace of mind, and we can help merchants stay PCI-Compliant.

f you run a restaurant, you probably don’t have time to think too much about credit card processing rates. However, understanding them can only help your bottom line. Mastercard has specific categories of interchange for restaurants, depending on what type of consumer credit card is used. Core and Enhanced Value credit cards do not receive these rates, but credit cards that offer rewards, like World, World High Value, and World Elite, do. Debit and prepaid cards also receive restaurant rates. In order to receive these rates, the restaurant must be registered under the MasterCard Codes of 5812 (restaurant) or 5814 (quick-serve merchant).

The rates for consumer credit cards are as follows:

Alternatively, the restaurant rate for a debit card is 1.19% + $0.10, and the rate for a prepaid card is 1.19% + $0.10.

There are other qualifications required to receive these rates as well. For example, the transaction must be a “card present” transaction, you must authorize and settle the transaction within 1 day, obtain 1 valid electronic authorization, and consumer credit cards must have a transaction total of $60.00 or less. If the transaction is over $60.00, then the interchange category changes to travel and entertainment, or T&E.

If you accept credit and debit cards, you most likely accept Visa. Being the most popular card worldwide, you would be remiss not to. Visa’s rates are available here to the public, but since they can be somewhat confusing we’ll go over them in this article.

Visa has eight categories for interchange rates: Consumer Check Card, Consumer Prepaid, Consumer Credit, Corporate and Purchasing, Corporate and Purchasing Prepaid, Business, Other, and International.

Visa USA Consumer Check Card

Visa divides their debit interchange program into two categories: Card present and card not present transactions. Then, it further divides cards into “Exempt” and “Regulated” categories from there. The difference between regulated and exempt debit is the amount of money the issuing bank has in assets. If the issuing bank has more than $10 billion in assets, the debit card is considered “regulated,” and if the issuing bank has less than $10 billion on assets, the debit card “unregulated,” or exempt.

The card-present rates are in the table below:

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Card-not-present rates:

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Visa USA Consumer Prepaid

Similar to the consumer check card, the consumer prepaid is also divided into exempt and regulated cards, and card-present and card-not-present transactions. The following table shows the card-present Visa interchange rates for the consumer prepaid card:

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Additionally, the following table shows the card-not-present rates for the Visa consumer prepaid card:

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Visa USA Consumer Credit

Visa’s Consumer Credit program’s interchange rates are dependent upon the industry in which the purchase is being made and the type of Visa card used. For example, a purchase made in a supermarket with the Visa Signature Preferred card would have an interchange rate of 2.10% + $0.10, while if that same supermarket purchase was made with a Traditional Rewards card the rate would be 1.65% + $0.10.

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Visa USA Corporate and Purchasing

The interchange rate for Visa’s Corporate and Purchasing program is dependent on whether the transaction belongs to the Commercial fee program or Government fee program, as shown in the following table:

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Further, there is also an interchange rate that applies to STP, or Straight Through Processing:

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Lastly, the Large Purchase Advantage Fee Program also applies to the Corporate and Purchasing card:

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Visa USA Corporate and Purchasing Prepaid

The Corporate and Purchasing Prepaid interchange rate is subject to five fee programs and whether the card is an exempt corporate prepaid, an exempt purchasing prepaid, or a regulated commercial prepaid:

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Visa USA Business (Excluding Prepaid)

The Business Credit Fee Program interchange rate is dependent on the spending tier, as shown in the table below:

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The Business Debit Fee Program is dependent on whether or not the card is exempt or regulated:

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Visa USA Other Transactions

Visa has interchange rates for transactions categorized as “other,” such as Credit Voucher transactions, Prepaid Loan Service Network, Money Transfer, Cash Disbursement transactions, and Other ATM Non-Cash Disbursement Transactions. These interchange rates are outlined below:

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Visa USA International Transactions

Finally, Visa has interchange rates for international transactions—rates for Visa cards used at a US merchant but issued outside of the US. These rates are dependent upon the type of card, as shown below:

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n the last few years, we entered a brand-new era in card technology. This new wave of EMV technology propelled us decades ahead of magnetic stripe cards.

The global adoption of chip cards is perhaps the biggest shift in credit cards we have ever seen. Businesses around the world are seeing a dramatic reduction in financial losses due to fraud. Consumers are also benefiting as they can now shop securely and safely.

Yet even with the major strides that have been made with the adoption of chip technology, there are many businesses that are still in the dark when it comes to EMV. In particular, many businesses are unaware of the shifts in liability that EMV technology has created for businesses.

Before we dive into EMV liability shift, let’s quickly recap what EMV means.

What is EMV?

Chargebacks give cardholders the right to dispute transactions.

WEMV stands for Europay, Mastercard, Visa. It represents a set of global standards based on chip card technology.

Chip card technology revolutionized the payment industry, and allows for the secure processing of electronic payments. It has single-handedly given businesses the upper hand in protecting their bottom line and their customers from fraud.

Here’s why:

Magnetic stripe technology can be easily compromised by the sophisticated hackers of today. Thankfully, chip technology is incredibly difficult to hack, which allows for a safer and more secure environment for your business and your customers.

When chip cards were globally adopted in 2015, important changes were also made in how liability is assigned for credit card fraud.

EMV Liability Shift Demystified

EMV liability shift refers to the transfer of responsibility for financial losses due to the fraudulent use of credit cards.

Because fraudsters could easily copy magnetic stripe cards using simple technology, card brands were responsible for the losses incurred due to fraud. These financial losses amounted to a staggering $16 billion in 2014 alone!

To put an end to the devastating losses due to fraud, card brands around the world united to create EMV technology that would fight fraud effectively. In 2015, card brands rolled out chip cards. It has been proven to reduce in-store counterfeit fraud wherever chip card technology has been implemented.

Many businesses don’t fully understand that when chip cards were adopted, the responsibility for financial losses transferred from card brands to businesses.

This liability shift has reduced the costs of counterfeit fraud and has made payments safer for everyone. Yet for a number of reasons, not all businesses have upgraded to the EMV-ready terminals that have the ability to detect a counterfeit chip card.

Protect Your Business from Financial Loss Due to Fraud

Fraudsters target businesses that have not yet adopted EMV-ready terminals. If you have not upgraded your terminal, your business is vulnerable every time a chip card is swiped instead of inserted.

If your business is at risk, get in touch with us so we can help you identify the right solution for your business. Simply click the button below to get started on winning the fight against fraud.

Debit card transaction rates and fees are usually cheaper than credit card transaction fees, but it is still important to understand what they are and exactly how much they are costing your business. Some debit transactions cost less, depending on the type of debit transaction (PIN vs. Signature), card brand, and ticket size.

PIN Debit is (Generally) More Expensive Than Signature Debit

It is important to note that running PIN debit transactions costs more in interchange than signature debit transactions. This is because PIN debit transactions must be routed through a PIN debit network, which charge debit network fees. Alternatively,signature debit transactions are routed through the card brand’s network, and therefore do not charge debit network fees. Instead, the card brands charge debit interchange rates, which tend to be cheaper for small-ticket transactions.However, since PIN debit fees are primarily flat fees and the interchange rates are generally lower, if a merchant runs more large-ticket debit transactions than small-ticket ones, PIN debit can actually be cheaper in the long run.

Debit Interchange Rates – Regulated vs. Unregulated

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Due to the Durbin Amendment, passed in 2011, debit interchange rates and fees are divided into two categories: regulated and unregulated. For a bank to fall under the “regulated” category, they must be worth more than $10 billion in assets, while the opposite is true for the unregulated category–if the issuing bank has less than $10 billion in assets, they fall into the “unregulated” category. For regulated debit, all PIN transactions are 0.05% + $0.21, with a fraud adjustment of $.01 for higher risk transactions. For unregulated PIN debit, see the chart below.

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MasterCard is the second-most used credit card worldwide, and as a merchant you probably accept it if you accept credit and debit card payments. As of October 19, 2019, MasterCard has updated their interchange rates as outlined below.

US Region MasterCard Consumer Credit Rates

MasterCard’s Consumer Credit Rates separates transactions into different “programs” and then interchange is decided based on both program category and by type of credit card. These credit card “types” encompass five categories:

The rates are displayed in the table below:

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US Region MasterCard Unregulated Consumer Debit and Prepaid Rates

The Durbin Amendment, passed in 2010 as part of the Dodd-Frank law intended to lower debit card interchange fees, differentiated between “regulated” and “unregulated” debit. Unregulated debit refers to debit cards issued by banks with less than $10 billion in assets, as those banks are considered higher risk. As a result, debit card interchange tends to be a little bit higher for unregulated debit as opposed to regulated debit. The following table shows the interchange rates for MasterCard’s unregulated consumer debit and prepaid program:

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US Region MasterCard Regulated Consumer/Commercial Debit and Prepaid Rates

In contrast with unregulated debit, regulated debit means that the issuing bank has more than $10 billion in assets. As they are considered lower risk than banks that do not, these rates are lower than the unregulated debit rates:

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US Region MasterCard Commercial Rates – Small Business Credit

MasterCard has an interchange rate program for small businesses with a company credit card. Some of the credit cards in this category include the Bank of America Business Advantage card, which is a Business Core card; the CitiBusiness/AAdvantage card, which qualifies as a Business World card; and the US Bank Business card, which is considered a Business World Elite card. These rates are determined based on both the program and the level of the credit card:

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US Region MasterCard Commercial Rates – Unregulated Commercial Debit/Prepaid and Large Market Credit

Mastercard commercial cards offer employers options to track employee spending via expense management, reporting, and card controls. These cards also offer integrated travel booking and management and up to 20% off on purchases commercial operations need, like office supplies. Mastercard even makes note on their website that using a commercial debit/prepaid card or large market credit card reduces payment processing expenses. For unregulated commercial debit/prepaid and large market credit cards, the interchange rates are dependent upon the program they are being used for:

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US Region MasterCard PIN Debit Rates

The following image shows MasterCard’s PIN debit rates. PIN debit rates apply instead of the previous debit tables, as they come into play when a business chooses to make customers input their PINs when making a debit transaction:

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US Region MasterCard ATM Rates

The following image shows MasterCard’s ATM Rates. The minimum quarterly transaction threshold is reviewed quarterly based on an issuer’s ATM transactions settled during the prior calendar quarter for the next subsequent quarter. The tier qualifications are effective in the second month of the next subsequent quarter. An issuer that qualifies for a tier based on their first quarter transactions (January-March), they will qualify for the new tiered rate commencing in May.

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t PayArc, we understand how vital it is to help merchants stay compliant within the Payment Card Industry’s Data Security Standards. We’ve all seen the headlines about giant companies being hacked and their customers’ credit and debit card information being sold on the Dark Web, so we know how scary it can be to have to be responsible for consumer data. That’s why we’ve partnered with ControlScan to help our merchants stay PCI-compliant and keep their customers’ trust.

ControlScan offers four major avenues for PCI Compliance: self-assessment, vulnerability scanning, compliance and security educational materials, and consulting services. They also offer access to live support through their portal, in the event that you need help with anything.

PCI 1-2-3 Self-Assessment Program

ControlScan describes their 1-2-3 self-assessment program as “like someone taking you by the hand and leading you through a dark forest”. That dark forest is the PCI self-assessment that most merchants can attest to, as only very large companies must undergo a formal QSA Assessment. It can be an extremely confusing and complex process, however, so ControlScan provides merchants with a communication portal with access to all the tools necessary to evaluate their PCI-DSS compliance.

External Vulnerability Scanning

The PCI DSS requires that external vulnerability scans be conducted at least once every three months on externally facing systems. The ControlScan PCI External Vulnerability Scanning Service will help you check for cross-site scripting, SQL injection, remote file inclusion and other vulnerabilities, determine where the issues are occurring, schedule and modify scan timeframes, and send vulnerability information to third parties to assist with compliance efforts.

Security Awareness Training

Another requirement of the PCI DSS is the regular education of company employees on security awareness. ControlScan offers a Security Awareness Training Service online, where you can pick the relevant courses to help your employees understand the security risks specific to your business. This training service comes complete with quizzes, certificates, and activity reports to help you keep track of your employees’ education.

Security Consulting Services

ControlScan also offers a security consulting service that helps business develop, maintain, and regularly test secure systems. This service also provides you a team of senior security consultants to advise you and your employees in how to make your business PCI compliant.

n 2006, due to the ubiquity of online shopping and lack of security around a new form of credit card use, American Express, MasterCard, Visa, Discover, and JCB International founded the Security Standards Council to combat the threat of cardholder data theft. This council drafted rules for merchants and payment processors, designed to protect cardholder data and keep everyone safe from fraud. The PCI-DSS—the Payment Card Industry Data Security Standards—are regulations that all merchants must stay compliant with in order to accept credit cards.

4 Levels of Compliance

Level 1:

This is considered the highest level of security. Merchants who must comply with Level 1 do more than 6 million Visa or Mastercard transactions annually. However, Visa may use their discretion to deem any merchant Level 1 depending on perceived risk. Level 1 is the only level where in-person assessments by a Qualified Security Assessor (QSA) and network scans of the merchant must be conducted on a yearly basis.

Level 2:

Merchants who must comply with Level 2 do between 1 million and 6 million Visa or Mastercard transactions annually. Unlike Level 1 merchants, Level 2 merchants, along with merchants belonging to Levels 3 and 4, do not have to be assessed by a QSA. Instead, merchants can assess themselves using the PCI questionnaire. The merchants who belong to the bottom three levels also must conduct a quarterly network scan and submit an attestation of compliance form.

Level 3:

Merchants who must comply with Level 3 do between 20,000 and 1 million Visa or Mastercard transactions annually.

Level 4:

Merchants who must comply with Level 4 do less than 20,000 Via or MasterCard transactions annually.

Staying Compliant

No matter what PCI level your business belongs to, PayArc is here to help. We ourselves are Level 1 compliant, so we know how important it is to protect cardholder data. We have partnered with ControlScan to keep the PCI-compliance process as simple as possible for our merchants while also being ahead of the game in security.

Want to know more? Click here to learn more about PayArc’s relationship with ControlScan and how it can benefit your business.

Business Impacts

Merchant portfolios may need be reviewed to prepare profitability models that support these interchange rate changes.

Visa

Canada Region

Changes to Performance Tier 1 Fee Program for Visa Debit Transactions

Visa will modify the description of the existing Canada domestic Performance debit fee programs.

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Changes to Performance Tier 1 Fee Program for Visa Consumer Credit Transactions

Visa will modify the rates and descriptions of the existing Canada domestic Performance credit fee programs.

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Changes to Domestic Interchange Rates

Visa will modify the rates to existing Canada domestic interchange programs that apply to purchase and credit voucher transactions for Visa consumer credit products.

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US Region

Changes to Interchange Fee Programs for Visa Consumer Transactions

Visa will modify the rate and description for the existing U.S. Supermarket Credit interchange program.

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Changes to Business and Commercial Fee Descriptors and Rates

 Visa will modify the rates and descriptions of existing business, corporate and purchasing interchange programs.

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Changes to Business Credit Interchange Fee Programs

Visa will modify the rates and descriptions of existing business credit interchange programs.

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Mastercard

New Mastercard Enterprise Solution Wholesale Travel Program Product Codes—Program Name

Mastercard is expanding the Wholesale Travel Program by introducing 5 new commercial B2B credit product codes. The existing Wholesale Travel Program is being renamed to support the changes as Mastercard B2B Product.

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2020-2021 Revised U.S.Region Interchange Programs and Rates for Assurance Framework

Mastercard is modifying the rates for existing U.S. domestic Consumer and Commercial interchange programs.

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Discover

Discover Rate Changes

Discover is modifying several interchange rates for consumer debit, consumer credit and prepaid card products.