Important Card Brand Updates Effective October 2022

August 1, 2022

On October 14, 2022, Payscout will implement enhancements to comply with Visa, Mastercard, Discover, and American Express card brand mandates unless otherwise noted.

Payscout has analyzed these card brand mandates to determine impacts to our products and systems. With the October 2022 release, we will implement support for:

  • Interchange Fee Program Changes
  • Card Network Fee Changes
  • Card Brand Rule Changes and Processing Enhancements
  • PIN Debit
Interchange Fee Program Changes

Visa – New Flexible Rate B2B Virtual Program Product 

Visa is introducing the new Flexible Rate B2B Virtual Program and interchange rates – applicable to key entered purchase transactions with the Flexible Rate B2B virtual card product from any Merchant Category Code.

Visa – New Flexible Rate B2B Virtual Program Product

TAKEAWAY: 

Merchants may see new Flexible Rate B2B Virtual Product interchange categories and rates.

Visa – Changes to B2B Virtual Payment Transaction Processing

Visa is expanding the B2B Virtual Payments Program by adding new interchange fee descriptions and rates:

Visa – Changes to B2B Virtual Payment Transaction Processing

Visa is also expanding the list of eligible Merchant Category Codes for the B2B Virtual Payments Program to include:

Visa  Merchant Category Codes for the B2B Virtual Payments Program

TAKEAWAY: 

Travel & Entertainment merchants may see additional, new B2B Virtual Product interchange categories and rates. 

Additional Travel & Entertainment merchants are eligible for the B2B Virtual Product interchange program.

Discover – New Commercial B2B Interchange Programs 

Discover is introducing new Commercial B2B interchange programs and rates – applicable to all purchase transactions with a Commercial B2B card product from any Merchant Category Code.

Discover – New Commercial B2B Interchange Programs

TAKEAWAY: 

Merchants may see new Commercial B2B interchange categories and rates.

Discover – Changes to Public Services Interchange Programs 

Discover is adding transaction limits to the existing PSL-Public Services interchange program. Consumer Exempt Debit and Consumer Exempt Prepaid sales must be less than or equal to $200. 

Consumer Exempt Debit and Consumer Exempt Prepaid sales greater than $200 will be eligible for the new PSL-Public Services (Maximum) interchange program.

Discover – Changes to Public Services Interchange Programs

TAKEAWAY: 

Public Services merchants will see new interchange categories and rates.

American Express OptBlue – New Industry Categories / Program Pricing 

American Express is adding five new industry categories and program pricing to their OptBlue service.

American Express OptBlue – New Industry Categories / Program Pricing

TAKEAWAY: 

Merchants within select industries will see a shift to new industry categories with lower rates.

American Express OptBlue – MCC Realignment 

American Express is realigning 14 Merchant Category Codes into the following industry categories:

American Express OptBlue – MCC Realignment

American Express OptBlue – MCC Realignment

American Express OptBlue – Rate Changes for Education and Government Tiers 

American Express is lowering the OptBlue Program Pricing Credit Tier rates for Education and Government merchants. 

American Express OptBlue – Rate Changes for Education and Government Tiers

TAKEAWAY: 

Education merchants will receive a 35-basis point rate decrease. 

Government merchants will receive a 15-basis point rate decrease.

Card Network Fee Changes
New Fees 

American Express OptBlue – New Program Continuation Fee 

Effective October 14, 2022, a new 0.03% fee will be assessed on all sales for merchants who exceed $3,000,000 in OptBlue volume in a rolling 12-month period and are assigned to the one of the following 7 industry categories:

  • B2B/Wholesale
  • Emerging Markets
  • Other
  • Restaurant
  • Retail
  • Services and Professional Services
  • Travel & Entertainment

TAKEAWAY: 

Merchants exceeding the $3,000,000 threshold will need to move to American Express Direct or be assessed the new fee on all OptBlue volume.

Existing Fees 

Mastercard – Excessive Authorization Attempts Fee 

To help reinforce proper processing behavior around repeated authorization declined attempts, Mastercard is revising the Excessive Authorization Attempts Fee criteria and pricing.

  • Effective October 1, 2022 – threshold of declined attempts reduced from 20 to 10
  • Effective January 1, 2023 – fee amount increased from $0.10 to $0.15
  • Effective January 1, 2024 – fee amount increased from $0.15 to $0.30
  • Effective January 1, 2025 – fee amount increased from $0.30 to $0.50

TAKEAWAY: 

Merchants should limit reattempted authorizations and/or use Account Status Inquiry (ASI) transaction types for account status checks. Each authorization attempt after 10 previously-declined attempts on the same card and same card acceptor ID within a 24-hour period will be assessed this fee.

Card Brand Rule Changes and Processing Enhancements  

Visa, Mastercard, Discover, and American Express – Decommission of 3DS 1.0 

All Card Brands will be decommissioning their 3DS 1.0 version of security protocol for online transaction authentication. 

TAKEAWAY: 

Merchants will need to convert off 3DS 1.0 Secure protocol or preferably, upgrade to 3DS 2.0. 

Merchants that remain on 3DS 1.0 will receive authentication errors/failures and may receive authorization declines.

Mastercard – Recurring Payment Indicator 

Mastercard is requiring the submission of the recurring payment indicator when submitting a card not present cardholder-initiated transaction that starts a series of recurring payments, as well as on each subsequent recurring payment.

Mastercard – Recurring Payment Indicator

TAKEAWAY: 

Merchants will be required to properly identify recurring payments. Failure to comply could lead to higher authorization decline rates.

Mastercard – New Merchant Advice Codes for Decline Response 51 (Insufficient Funds) 

Mastercard is introducing 7 new MAC response codes for authorization decline response code 51 (insufficient funds). These values will be provided by Mastercard to advise merchants when to resubmit the transactions for approval.

Mastercard – New Merchant Advice Codes for Decline Response 51 (Insufficient Funds)

TAKEAWAY: 

Merchants should adjust their authorization retry logic based on the new MAC values and/or response text.

American Express – Support for Purchase Return Authorizations 

American Express is introducing support for authorizations on credit/return transactions.

Purchase return authorization is optional for American Express at this time. As a reminder, purchase return authorization is mandatory for Visa, Mastercard, and Discover.

TAKEAWAY: 

Please ensure your third-party service or payment providers have enabled purchase return authorization functionality. If purchase return authorization functionality is not available to you, please take the following action:

Paywire/Payscout Payment Gateway customers - Update your software or contact your software provider to update the integration into Payscout's Payment Gateway.  

TSYS customers - Update your software or contact your software provider to update the integration into TSYS.

PIN Debit

STAR Interchange Fee Modifications (Effective August 17, 2022) 

STAR announced interchange per item fee changes to various merchant industries and introduced a new STAR Select Program. Payscout will support these changes and pass on the new fees as applicable.

STAR Network Fee Modifications (Effective August 17, 2022) 

STAR has replaced the Administration Fee ($0.01) and Switch Fee ($0.0625) with a flat Transaction Fee of $0.10.  The fee change will be bundled as part of the STAR per item Fee on monthly statements.

STAR and Accel Acquirer Licensing Fee Modifications (Effective August 17, 2022) 

STAR and Accel are revising the Acquirer Licensing Fee from $0.20 per transaction to 0.95%. The STAR percentage and per item fee will be adjusted to reflect these changes on monthly statements.

The world of Payments is constantly evolving. We'll keep you up to speed!

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