Important Card Brand Updates Effective April 2022

February 24, 2022

Effective April 2022, card brands (Visa, Mastercard, Discover, and American Express) are implementing a series of updates/changes which will affect pricing in certain categories and regions.

The information below is a summary of the fee changes, category modifications, and pricing adjustments that will result from these updates/changes.

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PROCESSING FEE CHANGES: NEW FEES
> VISA:

New Issuer Will Never Approve Reattempt Fee
Effective April 1, 2022, a new $0.10(domestic)/$0.15 (international) transaction fee will be assessed when a merchant attempts to authorize a transaction that had previously received a Category 1 decline.  

New Address Verification Service Fee
Effective April 1, 2022, a new $0.001 fee will be assessed on all card not present authorization requests and zero-amount account verifications where Address Verification Service is requested.

> MASTERCARD:

New Decline Reason Code Service Fee
Effective April 11, 2022, a new $0.02 fee will be assessed when card not present authorization requests decline with a response text or Merchant Advice Code of “01 Update Info” or “03 Do not retry”.

> DISCOVER:

New Address Verification Service Fee
Effective April 22, 2022, a new $0.005 fee will be assessed on all authorization requests where Address Verification Service is requested.

New Account Verification Service Fee
Effective April 22, 2022, a new $0.02 fee will be assessed on all Account Verification (zero dollar) authorization requests.

New Digital Investment Fee
Effective April 22, 2022, a new 0.01% fee will be assessed on all key entered card present and card not present sales.

> AMERICAN EXPRESS:

New OptBlue Transaction Fee
Effective April 22, 2022, a new $0.02 fee will be assessed on all credit and prepaid card sales.

 

PROCESSING FEE CHANGES: EXISTING FEES
> MASTERCARD:

Digital Enablement Fee
Effective April 04, 2022, the existing Mastercard Digital Enablement Fee for card not present sale transactions will increase from 0.01% to 0.02% (with a $0.02 minimum and a $0.20 maximum billing amount). This fee is listed on monthly statements as MASTERCARD MC DIGITAL ENABLEMENTFEE.

Account Status Inquiry Service Fee
Effective April 11, 2022, the existing Mastercard Account Status Inquiry Fee of $0.025 will be removed. This fee is listed on monthly statements as ZERO DOLLAR VERIFICATION.

CVC2 Transaction Fee
Effective April 11, 2022, the existing MastercardCVC2 Transaction Fee of $0.0025 will be removed. This fee is listed on monthly statements as MASTERCARD CVC2 TRANSACTION FEE.

> DISCOVER:

Assessment Fee
Effective April 22, 2022, the existing assessment fee for Discover transactions will be increased from 0.13% to 0.14%. This fee is listed on monthly statements as DISCOVER ASSESSMENT/SPONSORSHIP.

> AMERICAN EXPRESS:

OptBlue Assessment Fee
Effective April 22, 2022, the existing Assessment Fee for OptBlue transactions will be increased from 0.16% to 0.165%. This fee is listed on monthly statements as AMERICAN EXPRESS ASSESSMENT FEE.

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INTERCHANGE FEE PROGRAM CHANGES
> VISA:

Merchant Segment Interchange Fee Program Changes
Non-EMV tokenized card not present consumer credit purchase transactions qualifying at select existing Merchant Segment Interchange Fee Program rates will receive a 10-basis point increase. Small merchants (defined by Visa as those with up to $250,000 in total domestic annual Visa consumer credit volume) will not be impacted by this change.

New Small Merchant Product 1 and Product 2 Fee Programs
Visa will introduce new Small Merchant Product 1 and Product 2 Interchange Fee Programs for consumer credit purchase transactions from eligible small merchants. Visa defines small merchants as those with up to$250,000 in total annual domestic Visa consumer credit sales volume. Merchants that are eligible for one of the Merchant Segment Fee Programs will not be eligible for the new Small Merchant Programs.

Rate Changes for Existing Consumer Credit Fee Programs
Visa will modify interchange rates for the Product 1and Non-Qualified Consumer Credit Interchange Fee Programs.

Changes to the Utility Fee Program
Visa will modify the existing Utility Interchange Fee Program to provide differentiated rates for recurring bill payment utility transactions from non-regulated consumer and business debit and prepaid products. 

New Interchange Fee Programs for U.S. Manual Cash Disbursement Transactions
Visa will introduce three new Manual Cash Disbursement Fee Programs. These three new programs and rates are available on select product types accepted from Financial Institutions (MCC 6010) that provide the Access Fee/Surcharge Amount in the settled transaction detail.

> MASTERCARD:

Enhancements to Interregional Interchange Fee Programs
Mastercard will eliminate certain interregional interchange fee programs and replace them with new interregional interchange fee programs and qualifying criteria. Transactions will qualify in the following new categories:

·       Digital Commerce – qualified card not present transactions

·       Card present – qualified card present transactions

·       Base – non-qualified card present and card not present transactions  

New Installment Payments Interchange Program and Transaction Fee
Effective February 15, 2022, Mastercard will introduce the Installment Payments Program. This program provides consumers with the flexibility to split the cost of a purchase into equal installments and helps merchants scale “buy now pay later” offerings to consumers. Consumers will be able to access BNPL offers through their lender’s mobile banking app or through instant approval during checkout. The installment offers can be used directly on a merchant’s website or can be stored in digital wallets to then be used online or in-store wherever Mastercard is accepted. Along with higher approval rates, BNPL solutions have been shown to increase average sales by 45%and reduce cart abandonment by 35% post-implementation*. Mastercard will enable all merchants to participate in the program with no enrollment, registration, or technical work required. 

Mastercard does not expect merchants to opt-out of the program. However, any merchant wishing to opt-out from the program, may do so at any time by contacting Customer Care. These installment transactions will receive a decline authorization response if accepted by an opt-out merchant. Any merchant that opts-out of the program may also opt-back-in at any time by contacting Customer Care.

*Mastercard Study conducted using Mastercard transaction date; October 2020. 

Interchange Fee Rate Modifications
Mastercard will adjust existing interchange fee rates. 

New Merit 1 Day Care Interchange Fee Program
Mastercard will introduce new Merit 1 (Day Care) interchange fee program categories for their Core, Enhanced, and World consumer credit card products. Transactions from merchants operating as MCC 8351 (Child Day Care Services) will be eligible to have transactions qualify within the new program.

> DISCOVER:

Modifications to Existing Interchange Fee Rates
Discover will modify existing interchange fee rates.

New Charity Interchange Fee Program
Discover will introduce a new Charity interchange program (applicable to consumer card present and card not present sales with Merchant Category Code 8398 (Charitable and Social Service Organizations). Due to the addition of the new Charity interchange program, MCC 8398 is being removed from the eligibility requirements for PSL Emerging Markets and PSL Recurring Payments interchange programs.

Revised Transaction Amount Tolerance Level for Supermarkets and Warehouse Clubs
Discover will be revising the Transaction Amount Tolerance Level for the existing PSL-Supermarket/Warehouse Interchange Program from +/-10% to +/-15%. Transaction Amount Tolerance is an interchange requirement where the authorization amount and the purchase amount of a sale must be within a certain percentage of each other – defined by the Interchange Program and/or Merchant Category Code. 

Revised MCC Eligibility for the Consumer Credit PSL Recurring Payment Interchange Program
Discover will be revising the Merchant Category Code eligibility for the consumer credit PSL Recurring Payment Interchange Program by adding MCCs 4814 (Telecommunications) and 4899 (Cable Services).

Revised MCC Eligibility for the PSL Micro Ticket and PSL Express Services Interchange Programs
Discover will be revising the Merchant Category Code eligibility for the PSL Micro Ticket and PSL Express Services Interchange Programs by adding MCC 5552 (Electric Vehicle Charging).

> AMERICAN EXPRESS:

Revised OptBlue Services Interchange Program
American Express will be lowering the OptBlue Service Tier3 threshold amount maximum from $250.00 to $150.00 and lowering the OptBlue Service Tier4 threshold minimum from $250.01 to $150.01. The interchange % rate for OptBlue Service Tier3 will also be lowered from1.70% to 1.65%.

OptBlue Enablement of Telecommunication Services (MCC 4814) Under the ‘Other’ Industry Category
American Express will be removing Merchant Category Code 4814 from the Prohibited List and adding it under the “Other” Interchange Program for signing and pricing. 

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6 to 8-DIGIT BIN EXPANSION
The payment card industry introduced the 8-digitbank identification number (BIN) expansion as the new standard to be in effect April 2022. Payscout supports this industry change, and our systems are prepared to handle 8-digit BINs. We encourage you to ensure your third-party vendors and/or partners support this change as it relates to your transaction processing, routing and downstream activities.

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If you have questions about how these updates/changes affect you, please contact RM@payscout.com.

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